Not The Final Frontier, But Worth A Look Anyway

Want some exposure to the riskier side of emerging markets ETFs, but can't decide which country to focus on? The Claymore/BNY Mellon Frontier Markets ETF
could be just the ETF you're looking for. Off the bat, FRN is somewhat deceiving in that more than 31% of the ETF's weight is devoted to Chile, which is an emerging market, not a frontier market. That said, the Chile exposure might appeal to a more conservative investor and for those with a higher risk tolerance, FRN's allocations to Colombia, Egypt, Peru, Qatar, Oman and other frontier markets could be intoxicating. Despite allocations to those markets, FRN does feature plenty of U.S.-listed stocks investors may want to cozy up to, including Ecopetrol
, Chemical & Mining Co. of Chile
, Banco Santander-Chile
and Bancolombia
. FRN holds 46 stocks with an average market cap of $6 billion, so the emphasis on large-caps cuts down on the speculative factor. Financials account for almost 40% of the ETF while utilities, telecom and energy stocks also get double-digit weights. The expense ratio is 0.65% With the market looking like it's close to a top, investors can wait and probably get a better price on FRN, which did trade to a new 52-week high on Friday. Chile and Colombia may be the two best South American markets to be involved with right now and that includes Brazil. Professor Price target on FRN: $32.

Posted In: Long IdeasSpecialty ETFsEmerging Market ETFsTechnicalsGlobalPre-Market OutlookTrading IdeasETFs