BlackRock's (NYSE:BLK) iShares unit, the world's largest ETF issuer, will introduce the iShares MSCI Frontier 100 Index Fund on Thursday. The new ETF will trade on the New York Stock Exchange under the ticker "FM" and feature an expense ratio of 0.79 percent.
iShares filed plans for the frontier fund in December 2011. The MSCI Frontier Markets Index is currently home to 20 constituent nations. Frontier markets are viewed as riskier than emerging markets and iShares acknowledges in the ETF's filing frontier markets can see "greater illiquidity and price volatility due to smaller or limited local capital markets for such securities, or low or non-existent trading volumes."
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Constituent countries include Argentina, Bulgaria, Croatia, Kenya, Nigeria, Oman, Qatar and Vietnam, according to MSCI. The index is down 1.6 percent year-to-date MSCI data show and constituent firms primarily include energy, financial services and telecommunications names.
Other frontier markets ETFs include the PowerShares MENA Frontier Countries ETF (NASDAQ:PMNA) and the Guggenheim Frontier Markets ETF (NYSE:FRN). Single country frontier markets ETFs currently include the Global X FTSE Argentina 20 ETF (NYSE:ARGT), the Market Vectors Egypt ETF (NYSE:EGPT) and the Market Vectors Vietnam ETF (NYSE:VNM).
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