South Africa has been considered the prominent way to invest in the African market; however, a new country has taken the top spot in the latest ETF. TheStreet.com has broken down the components of Market Vectors Africa Index ETF (AFK) and explains that Nigeria and Financials are weighted the heaviest for country and sector, respectively. For starters, Nigeria makes up 32% of AFK with South Africa in second place at 25%. The other three countries that have a noteworthy portion of the ETF are Egypt (13%), Morocco (11%), and Equatorial Guinea (6%). Roger Nusbaum of TheStreet.com writes that this frontier market of Africa potentially has more potential for “modernization” than any other market.

With regard to sector investments in AFK, financials is the leader. The financial sector makes up one-third of the distribution within the 50-stock ETF due to large banks within each of the major countries. The next largest sector is basic materials, which carries 18% of the fund’s weight. Despite the great potential for growth in Africa, Mr. Nusbaum cautions investors of the volatility within a developing frontier market.

The Dow Jones Africa Titans 50 Index has just debuted, and Van Eck Global will issue the first ETF to follow the pan-African index. The Market Watch article explains that the new index is made up of 50 companies either headquartered in Africa or that produce more than half of their revenues within the continent. To be eligible for the index, companies must have at least $200 million of market capitalization and a three-month average daily trading volume of $1 million. In an effort to maintain diversity, Market Watch points out that the weight of any country is capped at 25% and there is a limit of 15 companies per country. Finally, the industries most heavily represented within the index are Basic Resources, Banking, and Oil & Gas. Michael A. Petronella, president of Dow Jones Index, contributes by saying, "It was important for us to develop an investable index that gives true exposure to the African region and is open to all African countries that qualify for it. This is the first pure African index to be used as underlying for an ETF.”

Van Eck Global has developed an ETF to follow the Dow Jones Africa Titans 50 Index. The Market Watch article identifies the fund as Market Vectors Africa Index ETF (AFK), which is set to begin trading on the NYSE July 14, 2008. AFK will be providing investors exposure to numerous markets associated with Africa, including Angola, Kenya, and Nigeria.

On June 12, 2008, Claymore Securities and The Bank of New York Mellon pioneered the only U.S.-listed frontier market ETF, known as Claymore/BNY Mellon Frontier Markets ETF (FRN). Two weeks after the launch of FRN, Claymore has announced a change to the underlying index meant to rebalance the markets. As a result of the change, The BNY Mellon New Frontier DR Index has added three more country markets to the mix, according to the Business Wire press release. The countries that have been added include Kuwait, Estonia, and Ukraine, which now brings the market exposure to 17 countries. According to Business Wire, the countries that now make up FRN are as follows: Bahrain, Chile, Columbia, Czech Republic, Egypt, Estonia, Georgia, Kazakhstan, Kuwait, Lebanon, Nigeria, Oman, Pakistan, Peru, Poland, Ukraine and United Arab Emirate. Christian Magoon, President of Claymore and Head of its ETF Group, states, "With its expanded 17 country-composition, FRN continues to provide frontier investors with access to this intriguing growth opportunity.

Claymore Securities has teamed up with The Bank of New York Mellon to debut the first U.S.-listed ETF to track frontier markets. Business Wire defines a "frontier market as a market of a country that is less developed than a traditional emerging market. The new fund, known as Claymore/BNY Mellon Frontier Markets ETF (FRN) is designed to track up to 41 countries considered to be within the frontier classification, such as Kenya, Morocco, Nigeria, Croatia, or Poland. Christian Magoon, President of Claymore, believes the intriguing aspect for investors of frontier markets is their growth opportunity, as they are currently in the early stages of their development and are considered the "next generation of emerging markets. FRN will link to The BNY Mellon New Frontier DR Index, which Business Wire reports is made up of companies with a minimum market capitalization of $100 million. Bank of New York Mellon, managing director Michael Finck provided his perspective with the statement, "U.S. investors have had little exposure to these smaller, less-developed markets, which are excluded from most benchmarks and overshadowed by the popular emerging markets.