VG has any funds for Frontier Markets??

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jafcorrea
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VG has any funds for Frontier Markets??

Post by jafcorrea » Thu Apr 06, 2017 7:57 pm

no ETF thanks ...... :sharebeer
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The Wizard
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Re: VG has any funds for Frontier Markets??

Post by The Wizard » Thu Apr 06, 2017 7:58 pm

Emerging markets you mean?
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jafcorrea
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Re: VG has any funds for Frontier Markets??

Post by jafcorrea » Thu Apr 06, 2017 8:04 pm

The Wizard wrote:Emerging markets you mean? .. no frontier market .. http://corporate.morningstar.com/US/doc ... c%2014.pdf
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Dominic
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Re: VG has any funds for Frontier Markets??

Post by Dominic » Thu Apr 06, 2017 8:11 pm

The Wizard wrote:Emerging markets you mean?
Frontier markets are a step deeper than emerging markets. Emerging markets include big players like China, India, Russia, South Africa, Mexico, etc. Frontier markets are on the development level of Argentina, Nigeria, Tunisia, Vietnam, Bangladesh, Lithuania, etc.

So to answer the question, no. Vanguard has an emerging markets fund, but that's it.

With that said, frontier markets funds are very expensive at the time. The mutual funds I've seen have expense ratios well in excess of 1%, and even the ETFs I've seen have expense ratios over 0.75% as well as extremely large bid/ask spreads. The general consensus among the experts is that frontier markets aren't worth holding. They correlate closely with emerging markets and they don't have much extra return potential, but they're a lot more risky and expensive to reach.

This post (and the rest of the thread) should be of interest. Most of the suggestions are unfortunately ETFs.

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Re: VG has any funds for Frontier Markets??

Post by gkaplan » Thu Apr 06, 2017 9:46 pm

Did you check Vanguard's website?
Gordon

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Re: VG has any funds for Frontier Markets??

Post by patrick » Thu Apr 06, 2017 10:04 pm

Frontier markets are very small markets. Looking at the total market cap of the MSCI indexes (from https://www.msci.com/documents/10199/42 ... d36472a703 and https://www.msci.com/documents/10199/89 ... de9d5e9a0d), developed and emerging markets add up to $46.21 trillion, while frontier markets are $0.15 trillion. In other words, frontier markets are a little less than a third of a percent of the size of the regular markets. If you are investing $100,000 at market weight among the markets, you'd have about $317 for frontier markets with the remaining $99,683 in the developed and emerging markets.

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Re: VG has any funds for Frontier Markets??

Post by Valuethinker » Fri Apr 07, 2017 4:02 am

patrick wrote:Frontier markets are very small markets. Looking at the total market cap of the MSCI indexes (from https://www.msci.com/documents/10199/42 ... d36472a703 and https://www.msci.com/documents/10199/89 ... de9d5e9a0d), developed and emerging markets add up to $46.21 trillion, while frontier markets are $0.15 trillion. In other words, frontier markets are a little less than a third of a percent of the size of the regular markets. If you are investing $100,000 at market weight among the markets, you'd have about $317 for frontier markets with the remaining $99,683 in the developed and emerging markets.
Better.

You'd have more money in each of Apple Google Facebook Shell etc. than you'd have in Frontier Markets ;-).

These are *tiny* markets.

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Re: VG has any funds for Frontier Markets??

Post by jafcorrea » Fri Apr 07, 2017 1:47 pm

thanks all for the advice's and explanations :beer
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Re: VG has any funds for Frontier Markets??

Post by nisiprius » Fri Apr 07, 2017 8:48 pm

Vanguard does not have any fund that invests primarily in so-called "frontier markets." I don't think Vanguard invests in any country that does not at least have the status of "emerging markets."

As their name suggests, "frontier markets" are a very small and relatively risky section of the global stock market.

Generally speaking, Vanguard is conservative, even stodgy, and generally offers mutual funds that have broad exposure to a diversified mix of stocks. It does not offer single-country funds (like the Fidelity Japan fund). If does not offer trendy arbitrary country groups like BRIC. If you go to their interactive, filterable list here and select "international" you will see that they offer 19 international stock funds, and the narrowest categories are broad regions with multiple countries: European, Pacific, Emerging Markets. Many are "international" (whole world ex-US). Many are "global" and one is "total world."
Last edited by nisiprius on Fri Apr 07, 2017 9:01 pm, edited 1 time in total.
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Re: VG has any funds for Frontier Markets??

Post by sschoe2 » Fri Apr 07, 2017 9:00 pm

patrick wrote:Frontier markets are very small markets. Looking at the total market cap of the MSCI indexes (from https://www.msci.com/documents/10199/42 ... d36472a703 and https://www.msci.com/documents/10199/89 ... de9d5e9a0d), developed and emerging markets add up to $46.21 trillion, while frontier markets are $0.15 trillion. In other words, frontier markets are a little less than a third of a percent of the size of the regular markets. If you are investing $100,000 at market weight among the markets, you'd have about $317 for frontier markets with the remaining $99,683 in the developed and emerging markets.
In other-words, the frontier markets are like penny stocks.

am
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Re: VG has any funds for Frontier Markets??

Post by am » Fri Apr 07, 2017 9:04 pm

Is there a small value frontier market fund? I'd let a bit ride on that one for fun :D

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Re: VG has any funds for Frontier Markets??

Post by uansari1 » Fri Apr 07, 2017 9:08 pm

Fidelity has a sub 1% ETF (FM)...may want to check that out.

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Re: VG has any funds for Frontier Markets??

Post by TropikThunder » Fri Apr 07, 2017 11:07 pm

nisiprius wrote: As their name suggests, "frontier markets" are a very small and relatively risky section of the global stock market.
I know OP said "No ETF's" but just for grins I took a look at some FM ETF's (niche markets like this are much more likely to have an ETF available but not a mutual fund). iShares has the MSCI Frontier 100 ETF FM, which allows an investor to "gain easy access to a virtually untapped investment opportunity" :beer by holding the 100 largest FM companies. The Top 10 holdings, which make up 37.05% of the total (that's a big proportion!):
  • - National Bank Of Kuwait S.A.K.: 6.22%
    - Kuwait Finance House K.S.C.: 4.74%
    - Viet Nam Dairy Products: 4.33%
    - YPF S.A. ADS (Argentine oil company): 4.12%
    - Grupo Financiero Galicia S.A. ADS (Argentine bank): 3.38%
    - Pampa Energia ADR REPSG SA (Argentine electrical utility): 3.31%
    - Mobile Telecommunications Co. (Kuwaiti telecom): 3.31%
    - Banco Macro ADR (Argentine bank): 2.98%
    - Maroc Telecom (Moroccan telecom): 2.38%
    - Safaricom Ltd. (Kenyan telecom): 2.28%
I learned something today: "An American depository share (ADS) is a U.S. dollar-denominated equity share of a foreign-based company available for purchase on an American stock exchange. American Depositary Shares (ADSs) are issued by depository banks in the U.S. under agreement with the issuing foreign company."
http://www.investopedia.com/terms/a/ads.asp
I'm not inclined myself, but it is interesting to see what's included.

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Re: VG has any funds for Frontier Markets??

Post by baw703916 » Fri Apr 07, 2017 11:33 pm

Well, at least FM (the ETF) does invest in frontier markets. Some "frontier market" funds are a mixture of Emerging and Frontier, which means that the EM part of the portfolio costs a lot more than it should.
Last edited by baw703916 on Mon Apr 10, 2017 5:56 pm, edited 1 time in total.
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Re: VG has any funds for Frontier Markets??

Post by patrick » Sat Apr 08, 2017 4:23 pm

It looks like the cheapest frontier market ETF is now FRN with "only" a 0.70% expense ratio. I must admit that I'm tempted to put 0.3% of my stock investments in there now that I've gone to the trouble of calculating the number (their fraction of world equity market cap).

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Re: VG has any funds for Frontier Markets??

Post by Northern Flicker » Sat Apr 08, 2017 5:59 pm

Veiex/Vemax, the Vanguard emerging market index fund, invests in China A-shares, which have frontier market status in the MSCI taxonomy.
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Re: VG has any funds for Frontier Markets??

Post by jafcorrea » Sat Apr 08, 2017 6:40 pm

patrick wrote:It looks like the cheapest frontier market ETF is now FRN with "only" a 0.70% expense ratio. I must admit that I'm tempted to put 0.3% of my stock investments in there now that I've gone to the trouble of calculating the number (their fraction of world equity market cap)... YTD 22.01% :greedy
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Re: VG has any funds for Frontier Markets??

Post by baw703916 » Sun Apr 09, 2017 9:16 pm

jalbert wrote:Veiex/Vemax, the Vanguard emerging market index fund, invests in China A-shares, which have frontier market status in the MSCI taxonomy.
But does that actually give you exposure to anything different? I realize that the different share classes in China don't all move in lockstep for various reasons, but they're participating in the same country's economy.
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Re: VG has any funds for Frontier Markets??

Post by Valuethinker » Mon Apr 10, 2017 10:27 am

am wrote:Is there a small value frontier market fund? I'd let a bit ride on that one for fun :D
You mean with a Momentum bias and the Profitability factor built in? ;-).

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Re: VG has any funds for Frontier Markets??

Post by nisiprius » Mon Apr 10, 2017 3:22 pm

Valuethinker wrote:
am wrote:Is there a small value frontier market fund? I'd let a bit ride on that one for fun :D
You mean with a Momentum bias and the Profitability factor built in? ;-).
A "buzzword parity" strategy.
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Re: VG has any funds for Frontier Markets??

Post by harvestbook » Tue Apr 11, 2017 9:18 am

jafcorrea wrote:YTD 22.01% [/b][/color] :greedy
[/quote]

FM's lost 66 percent in 2008...
I'm not smart enough to know, and I can't afford to guess.

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Re: VG has any funds for Frontier Markets??

Post by jafcorrea » Tue Apr 11, 2017 10:22 am

harvestbook wrote:
jafcorrea wrote:YTD 22.01% [/b][/color] :greedy
FM's lost 66 percent in 2008...okay, can you find what is the gain from 2008 until today? [/quote]
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Re: VG has any funds for Frontier Markets??

Post by alex_686 » Tue Apr 11, 2017 10:23 am

I am not a fan of Frontier Markets in general due to the poor governance inherent in those markets. Governance is one of the prime attributes that separates Frontier from Developing markets. Insider trading, market manipulation, management skimming profits off of the top, etc.

I am doubly skeptical of passive investing in Frontier Markets. Investing indexes have "reconstructability" criteria. Included stocks must be liquid enough so funds can buy and sell to meet inflows. This means only the biggest companies are included, that is, the companies which are the least "Frontier" like. In my mind the primary reason to invest in Frontier Markets is to go after the smaller and value companies, which tend to have illiquid stock and are not on the investable indexes. If i were to do Frontier Markets I would look hard at actively managed funds to see if I could find one that I liked.
Last edited by alex_686 on Tue Apr 11, 2017 10:55 am, edited 1 time in total.

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Re: VG has any funds for Frontier Markets??

Post by Theoretical » Tue Apr 11, 2017 10:54 am

This is one option: EITEX - Eaton Vance Parametric Tax-Managed Emerging Markets at .95% ER but 2% turnover and a slight small value tilt.

It clusters emerging and frontier markets countries into size clusters and equal weights each cluster. 25% of the portfolio is FM. The downside is a $50K minimum.

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Re: VG has any funds for Frontier Markets??

Post by fennewaldaj » Sat Jan 12, 2019 3:13 am

Theoretical wrote:
Tue Apr 11, 2017 10:54 am
This is one option: EITEX - Eaton Vance Parametric Tax-Managed Emerging Markets at .95% ER but 2% turnover and a slight small value tilt.

It clusters emerging and frontier markets countries into size clusters and equal weights each cluster. 25% of the portfolio is FM. The downside is a $50K minimum.
This fund actually looks pretty interesting. It would be better if it only used tier 2-4 since for tier 1 I would essentially be overpaying for the usual EM suspects. I can use a trick to get the non tax managed institutional version in my fidelity brokerage link.

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Re: VG has any funds for Frontier Markets??

Post by nedsaid » Sat Jan 12, 2019 10:18 am

nisiprius wrote:
Mon Apr 10, 2017 3:22 pm
Valuethinker wrote:
am wrote:Is there a small value frontier market fund? I'd let a bit ride on that one for fun :D
You mean with a Momentum bias and the Profitability factor built in? ;-).
A "buzzword parity" strategy.
I myself am waiting for the South Sudan Small-Cap Value fund.
A fool and his money are good for business.

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