Looking for ways to diversify your investment portfolio with high-growth potential outside traditional markets? Frontier markets — often overlooked but packed with opportunity — can offer compelling diversification benefits. These emerging economies, typically in Africa, Southeast Asia, and Latin America, present a unique chance for long-term growth and reduced correlation with developed markets. In this post, we break down the top 10 frontier market funds that investors should consider, whether you’re new to frontier investing or aiming to broaden international exposure. Each fund we highlight has unique attributes worth evaluating based on your risk tolerance and goals.
1. iShares MSCI Frontier 100 ETF (FM)
The iShares MSCI Frontier 100 ETF (FM) is one of the most popular ways to gain exposure to a broad basket of frontier markets across multiple regions. It tracks the MSCI Frontier Markets 100 Index with diversified holdings in countries like Vietnam, Kenya, and Argentina, helping investors benefit from economic growth in developing frontier economies. With reasonable fees for its category and strong liquidity, FM is often recommended for both beginner and seasoned global investors. Its ETF structure also allows easy trading on major exchanges like NYSE Arca, making it a convenient option for frontier allocation in your portfolio.
2. Dimensional Frontier Markets ETF (DFAM)
The Dimensional Frontier Markets ETF (DFAM) takes a systematic, research-based approach to frontier investing, combining economic fundamentals and diversification strategy. DFAM invests in smaller, less accessible economies such as Bangladesh and Nigeria to capture attractive growth potential that isn’t always reflected in broader emerging market funds. A key strength of this fund is Dimensional’s research-driven methodology, which seeks to balance risk and return while avoiding concentrations in any single market. Investors seeking a disciplined, science-based frontier exposure often find DFAM a compelling addition to their international holdings.
3. Franklin FTSE Frontier Markets ETF (FRON)
The Franklin FTSE Frontier Markets ETF (FRON) tracks the FTSE Frontier Index and offers exposure to a diversified group of frontier countries. This fund emphasizes liquidity and investability while maintaining access to growth markets such as Morocco, Romania, and Pakistan. With competitive expense ratios and regular rebalancing, FRON appeals to investors who want cost-efficient exposure to less correlated global markets. Additionally, Franklin Templeton’s experience in international investing makes FRON a strong candidate for those who prefer actively managed frontier strategies with a disciplined risk focus.
4. Global X MSCI Nigeria ETF (NGE)
The Global X MSCI Nigeria ETF (NGE) offers targeted exposure to Nigeria’s equity market, one of the largest frontier economies in Africa. While not as broadly diversified as other frontier funds, NGE focuses on sectors like financials and energy that are central to Nigeria’s economic landscape. Investors seeking concentrated frontier exposure with potential high returns should weigh this fund’s risks — including political and currency volatility — against its growth opportunities. As Nigeria continues to develop, NGE may serve as a compelling satellite holding within a broader diversified portfolio.
5. VanEck Vietnam ETF (VNM)
The VanEck Vietnam ETF (VNM) is tailored to capture growth in Vietnam, one of Asia’s most dynamic frontier markets. VNM invests across Vietnamese large- and mid-cap equities, benefiting from expanding consumer markets and foreign direct investment. Vietnam’s economic trajectory has attracted attention from global investors, and VNM provides a straightforward route to capitalize on that momentum. While country-specific funds carry higher concentration risk, VNM can enhance diversification when paired with broader frontier funds in your international allocation strategy.
6. iShares MSCI Emerging Markets ex China ETF (EMXC)
While not labeled solely a frontier fund, the iShares MSCI Emerging Markets ex China ETF (EMXC) includes a meaningful mix of frontier and emerging markets outside China. This blend helps investors access high-growth regions like Indonesia, South Africa, and frontier peers without overconcentrating in one major market. EMXC’s approach can complement pure frontier funds by smoothing volatility and adding broader global diversity. For investors seeking a bridge between emerging and frontier exposures, this ETF provides a pragmatic, diversified option with comparatively robust liquidity and manageable fees.
7. Franklin FTSE Kenya ETF (FKEN)
The Franklin FTSE Kenya ETF (FKEN) focuses on Kenya’s equities, a key frontier economy in East Africa known for its tech innovation and regional commerce. Though concentrated by design, FKEN offers access to sectors driving Kenya’s growth, from financial services to consumer goods. It’s suited for investors who want specific regional exposure within a diversified strategy. Be mindful of the inherent risks of single-country funds, including political shifts and currency movements, while considering FKEN as a satellite allocation to larger frontier holdings.
8. SPDR S&P Emerging Middle East & Africa ETF (GAF)
The SPDR S&P Emerging Middle East & Africa ETF (GAF) offers broad exposure to both emerging and frontier economies in the Middle East and Africa. While GAF isn’t strictly a frontier fund, its inclusion of frontier nations enhances diversification benefits and access to dynamic growth markets like Morocco and Qatar. This ETF is ideal for investors looking to diversify beyond traditional Asia and Latin America by incorporating frontier markets with strong growth potential. Its diversified regional blend helps mitigate concentration risk and supports a well-rounded global portfolio strategy.
9. Invesco Frontier Markets ETF (FRN)
The Invesco Frontier Markets ETF (FRN) invests across a mix of frontier nations, emphasizing broad exposure and liquidity. FRN’s holdings often include countries like Kenya, Vietnam, and Argentina, providing a geographically varied frontier allocation. With a structure designed for diversification and cost-efficiency, this fund appeals to investors who want a straightforward frontier solution without overly concentrated positions. Its balanced approach makes FRN a solid core holding for international portfolios focused on long-term growth and frontier market potential.
10. Global X MSCI Bangladesh ETF (BGD)
The Global X MSCI Bangladesh ETF (BGD) targets Bangladesh’s rapidly developing equity market. With strong demographic trends and expanding domestic demand, Bangladesh represents one of Asia’s exciting frontier investment opportunities. BGD provides focused exposure to this market’s growth story, capturing sectors like financials and consumer products. While higher country-specific risk exists, BGD can serve as a strategic addition to frontier allocations that already include broader funds. Investors should balance potential gains with volatility considerations as part of a diversified global investment plan.
Conclusion
Diversifying into frontier market funds can enhance your global investment strategy by tapping into high-growth economies with relatively low correlation to developed markets. From broad, diversified ETFs like FM and FRN to targeted plays such as VNM and BGD, there’s a frontier fund for varying risk profiles. Remember, frontier investing can be volatile, so balancing these funds with core holdings and regular reviews is key. Carefully consider fees, liquidity, and country exposure before investing, and consult with a financial advisor to align these opportunities with your long-term goals.