Potential Frontier ETFs?

By Carl Delfeld of the Chartwell ETF Advisor

I am always getting calls from investors wondering when there will be an exchange-traded fund for markets like Nairobi, Vietnam, Mongolia, Jordan or Kuwait. Regulatory hurdles are one issue and another is the liquidity and company concentration in particular markets.

To put things into perspective, here is some data on overseas stock markets courtesy of Portfolio magazine.

London Stock Exchange
Opened in 1801
3,301 listed companies
$4 trillion market cap

Tokyo Stock Exchange
Opened in 1878
2,422 listed companies
$4.7 trillion market cap

Kuwait Stock Exchange
Opened in 1963
190 listed companies
$106 billion market cap

Nairobi Stock Exchange
Opened in 1954
58 listed companies
$10.7 billion market cap

Tehran Stock Exchange
Opened in 1967
332 listed companies
$32 billion market cap

Hong Kong Stock Exchange
Opened in 1914
1,206 listed companies
$2.2 trillion market cap

Kathmandu Stock Exchange
Opened in 1994
134 listed companies
$2.8 billion market cap

New York Stock Exchange
Opened in 1792
3,617 listed companies
$16.2 trillion market cap

But I think I know what is driving the phone calls. The Kuwait exchange is up 486% over the last five years, Nairobi up 400% and Kathmandu is up 216% while the Dow is up 50% and the FTSE 100 up 42% over the same period.

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