The developed markets are in the bear’s grip for many months now due to the credit crunch. Investors looking for better returns went to emerging markets like Brazil,India, China, etc. last year and even early this year.But that strategy is not working anymore since the emerging markets have plunged as well.My friend Vlad highlights some of the emerging market indices in the article titled Emerging markets indexes.
So this year investors are going to unusual places to invest. These are countries like Vietnam, Egypt,Peru,Indonesia,Romania, etc. Together these extremely risky markets are called “Frontier markets”. Already this year, ETF providers have luanched many ETFs for the frontier market countries.
In this post, lets look at a few ADRs,funds to invest in the frontier markets:
1.Credicorp Ltd. (BAP)
Credit Corp is a banking company in Peru.The stock has had an incredible year run as the chart shows below.BAP has a PE of 13.05 and a dividend yield of 2.10%. Beta is 1.1.The average annual dividend growth for the past 5 years is 45.41%.
Chart: 5 Year Growth
2.Indonesia Fund (IF)
IF is a closed-end fund now trading at a discount of -11.24%.This a small fund with assets of just $106M.
3.Thai Capital Fund (TF)
TF is a closed-end fund now trading at a discount of -9.93%. This a small fund with assets of just $41M.TF is down YTD some 26%.
4.Turkish Investment Fund (TKF)
This CEF has an asset base of about $111M and it is down some 26% YTD.
5.Philippines Long Distance Telephone Co (PHI)
Telecom company in the Philippines.with a high dividend yield of 5.14%.
Again the above investment vehicles should be carefully evaluated before adding them to a well diversified portfolio.
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