Frontier Markets Are Outperforming Emerging Markets So Far This Year 1

The Guggenheim Frontier Markets ETF (FRN)

The Guggenheim Frontier Markets ETF (FRN) offers exposure to an asset class that is often overlooked by many investors: stocks of markets classified as “frontier”. Being underdeveloped, frontier markets (FM) are often considered risky. However, they also offer the potential for impressive returns over the long run.

The frontier market fund is up 12.5% so far this year, beating emerging market (EEM) (VWO) performance at 12.2%, and far ahead of developed market (EFA) (VEA) performance at 7.2%. The FRN fund has 80% of its total assets in American depositary receipts (ADRs) and global depositary receipts (GDRs) which make deeper introspection into the fund and its top-performing stocks, worthwhile, especially for active investors.

Top 3 sectors: YTD

We took a closer look at the performance of companies tracked by the Guggenheim Frontier Markets ETF (FRN) as of April 19. From a sector perspective, the information technology and the utility sectors have done particularly well so far this year delivering 40.25% and 37.88% returns (see chart above). Industrials have also done well with a 23.75% return to its name YTD (as of April 19). These sectors command a 6.23%, 3.53%, and 8.98% weight in the FRN portfolio.

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