FM - FM: Frontier Markets ETF A Risk-On Tool

2024-07-06 00:33:44 ET

Summary

• This article explores the iShares Frontier and Select EM ETF, an ETF targeting frontier markets - even smaller and less developed than emerging markets.
• Frontier markets have lower liquidity and higher risk compared to emerging markets.
• Geographically, the fund is concentrated in Vietnam, Kazakhstan, and Romania as top exposures. Financials, Materials, and Real Estate are the dominant sectors.
• Frontier markets are more susceptible to political instability, impacting valuations.
• One might experience difficulty to enter or exit positions quickly, leading to wider bid-ask spreads and potential price gaps.

Thesis

The iShares Frontier and Select EM ETF ( FM ) is an equities exchange traded fund. While most investors are familiar with emerging markets and the risk/reward implications, few understand the definition of frontier markets and the analytics behind them. ...

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