It looks like BlackRock‘s (NYSE:BLK) iShares division is finally ready to make good on a frontier-markets fund after months of setup.
We reported back in April that investment product provider MSCI Inc. (NYSE:MSCI) was launching a new index, the MSCI Frontier Markets 100 Index — a spin-off of its broader MSCI Frontier Markets Index and comprising 100 of its largest and most liquid companies — in anticipation of a new iShares ETF.
Barron’s “Focus on Funds” writer Brendan Conway confirmed that the fund will launch this Thursday on the NYSE Arca exchange under the ticker FM, with a fee of 0.79%.
The fund’s makeup will be similar to what was expected in April, holding stocks from 20 frontier-market countries — Argentina, Bangladesh, Croatia, Estonia, Jordan, Kazakhstan, Kenya, Kuwait, Lebanon, Mauritius, Nigeria, Oman, Pakistan, Qatar, Romania, Serbia, Sri Lanka, Ukraine, the United Arab Emirates and Vietnam. Lithuania didn’t make the cut.
While emerging markets have a number of exchange-traded funds to play with, frontier markets are a relatively new … well, frontier. The only other multi-country frontier-market funds floating around are the Guggenheim Frontier Markets ETF (NYSE:FRN) and the PowerShares MENA Frontier Countries Portfolio (NASDAQ:PMNA).
Investors certainly have a reason to feel enticed by the unbridled growth prospects of the frontier-market stocks, but as I said back in April: “… the frontier ain’t called the frontier for nothin’, so to speak. Just like cholera and starvation dotted the Oregon Trail, political unrest, relatively thin trading and numerous other pitfalls lurk on this new frontier.”
Ergo, go into the fund knowing it’s a wholly speculative play.