Frontier Markets: top 3 sectors
We took a closer look at the performance of companies tracked by the Guggenheim Frontier Markets ETF (FRN)and found that information technology, utilities, and industrials have been the top 3 performing sectors for the ETF do far this year (as of April 19). These sectors command a 6.23%, 3.53%, and 8.98% weight in the FRN portfolio and have returned 40.25%, 37.88%, and 23.75%, respectively YTD.
The FRN has about 6.23% of its portfolio allocated to Argentina-based e-commerce company, MercadoLibre, Inc. (MELI). The ADR of the company trades under the symbol MELI on NASDAQ. MELI is up over 40% YTD. Dividend yield for the stock equals 0.27. The stock trades at a current P/E ratio of 63.13.
Within the utility sector, the Argentina-based integrated electricity company, Pampa Energia S.A. (PAM) and public service company, Empresa Distribuidora y Comercializadora Norte S.A. (EDN) have done well for the ETF. ADRs of these companies trade on the NYSE under the symbol PAM and EDN, respectively.
The FRN has about 2.26% of its portfolio allocated to PAM and about 0.23% to EDN. PAM is up 63.1% YTD, while EDN is up 29.5%.
Within the industrials sector:
- Panama-based airline passenger and cargo service provider, Copa Holdings, S.A. (CPA);
- Vietnam-based construction company, FLC Faros Construction JSC; and
- Morocco-based ports operator, Marsa Maroc;
have done well for the ETF. Among these, Copa Holdings’ ADR trades on the NYSE under the symbol CPA. Faros Construction trades on the Ho Chi Minh exchange with the ticker ROS, and Marsa Maroc is listed on the Casablanca stock exchange under the ticker SODEP.
The FRN has about 6.24% of its portfolio allocated to CPA, 1.29% to ROS, and about 0.31% to SODEP. CPA is up 26% YTD at the NYSE, while ROS and SODEP have gained 24.2% and 14.65%, respectively, at their local bourses. These stocks are currently trading at a price multiple of 23.44, 142.17, and 16.84, respectively.
Let’s now dive into some of the frontier markets (FRN) (FM) in which the FRN is invested to understand what added to, and what dragged performance for the fund so far this year. We will also attempt to identify the top US exchange-traded ADRs from these regions, alongside their key financial metrics.