According to MSCI, some very obscure stock markets have been doing quite well of late. Kenyan shares were up 8.42% in dollar terms in the first half of this year. Qatari stocks gained more than 29%. And Lebanese shares have soared nearly 55%.

These kinds of numbers are in stark contrast with the rest of the world's depressed equity scene. The MSCI Emerging Market index was down 11.64% year to date at June 30 and the World Developed Markets had given up 10.25%. Even though the MSCI U.S. index has held up fairly well this year, it still significantly trailed these so-called "frontier exchanges," having lost 11.20%.

Characterized by eye-catching growth rates, dozens of small, evolving stock markets are fueling interest in the least explored corners of the global equity market. The interest has prompted the creation of a half dozen new ETFs that are awaiting listing. Three Market Vectors ETFs will offer passive exposure to Africa, the Gulf states and to the broad frontier market. WisdomTree is developing a fund that tracks the largest Middle Eastern dividend-paying stocks. PowerShares is offering a Middle East and North African play.

The Claymore/BNY Mellon Frontier ETF is the first one to be trading, offering rather filtered frontier exposure; more than half of its assets are actually invested in emerging markets.

This begs the question: What exactly are frontier markets? Michael Hartnett, Merrill Lynch's global emerging market equity strategist, says there are no strict demographic or economic metrics defining these places. "Rather," he explains, "these are developing economies with undercapitalized equity markets that are relatively new, thinly traded, with weaker regulatory frameworks, lower levels of transparency and low levels of foreign ownership."

Hartnett himself has helped better define these markets: Earlier this year, Merrill established a 17-country, 50-stock Frontier Market Index. The minimum requirements for inclusion in this "investable" index include companies with a market cap of $500 million or more; a three-month average daily turnover of at least $750,000; and foreign ownership that exceeds 15%. The largest half dozen markets making up the index are the United Arab     Emirates (which represents 23.1% of the fund), Kuwait (18.1%), Pakistan (13.6%), Cyprus (10.9%), Nigeria (9.4%) and Kazakhstan (8.3%).

The index is weighted by market cap, with banks representing the largest chunk of the portfolio (39.4%), followed by financial services (25.7%), oil and gas (13.6%), technology (5.2%) and industrial goods and services (4.9%).

Collectively, these indexes encompass markets with nearly 1 billion people, with a collective nominal GDP of $2.7 trillion and with an equity market valuation of $1.9 trillion. These numbers are significantly smaller than those of traditional emerging markets, which comprise nearly four times more people, with almost five times the aggregate GDP and close to seven times the market capitalization.

A back test of the index from January 2000 through December 2007 revealed that frontier markets were up 20% a year while emerging markets were up 12%, and the S&P 500 was up just 1%.

Still, most advisors would feel reticent about shifting client money into distant markets that most investors don't even know have stock exchanges. And given today's challenging environment where few securities and asset classes appear safe, investing in both the active and recently active war zones of Pakistan, Lebanon, Kuwait and Croatia may not seem to be the best way to attract and maintain clients.

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