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(3/2/08 update in bold underscore.) On Tuesday, Claymore registered an ETF--Claymore/BNY Frontier DR--that will track the BNY Frontier DR Index. Should the fund launch, it will be the first U.S.-listed ETF devoted exclusively to so-called 'frontier' markets, which consists of stocks domiciled in developing countries that typically receive bit (if any) weightings in the prevailing broad emerging markets indexes. Frontier countries typically span regions including sub-Saharan Africa, the middle east, eastern Europe, the Pacific rim, and central and South America. The following countries are eligible for inclusion in BNY's index (weighting as of Jan. 31, 2008, per BNY): Bahrain (4.7%), Jordan, Kuwait, Lebanon (4.5%), Oman, Qatar, United Arab Emirates, Egypt (26.8%), Ghana, Kenya, Malawi, Mauritius, Morocco, Nigeria, Tunisia, Zimbabwe, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Kazakhstan (21.1%), Latvia, Lithuania, Poland (19%), Romania, Slovak Republic, Slovenia, Ukraine, Bangladesh, Pakistan (9.9%), Papua New Guinea, Sri Lanka, Vietnam, Ecuador, Jamaica, Panama and Trinidad & Tobago. If you invest in an emerging markets ETF, you probably already have exposure to some of the names that the Claymore fund will own. For instance, Poland, the Czech Republic, and Egpyt are part of the MSCI Emerging Markets Index. As such, these nations accounted for 1.6%, 0.8%, and 0.7% of Vanguard Emerging Markets ETF, respectively, as of Feb. 29, 2008. Per the prospectus, the BNY index consisted of 26 names as of Jan. 31, 2008. Though we weren't able to find with the actual holdings list, we screened BoNY's depositary receipt database using some of the criterion laid out in the prospectus. Here's what we came up with, sorted by country of domicile: Bahrain - Gulf Finance House | GFH | General Finance
- Investcorp Bank | IVC | Equity Invest Instru
Croatia - Hrvatski Telekom | THTC | Fixed Line Telecom.
- INA Industrija Nafte | HINA | Electricity
Czech Republic - Zentiva | ZEND | Pharma. & Biotech.
Egypt - EFG Hermes | EFGD | General Finance
- Orascom Telecom | OTLD | Mobile Telecom.
- Lecico Egypt | LECI | Industrial Engineer.
Georgia - Bank of Georgia | BGEO | Banks
Kazakhstan - Chagala | CHGG | Leisure Goods
- Halyk Savings Bank of Kazakhstan | HSBK | Banks
- JSC Alliance Bank | ALLB | Banks
- KazakhGold | KZG | Mining
- Kazakhstan Kagazy | KAG | Forestry & Paper
- Kazkommertsbank | JSCD | Banks
- Kazkommertsbank | KKB | Banks
- KazMunaiGas EP | KMG | Oil & Gas Producers
- ShalkiyaZinc | SKZ | Mining
Lebanon Lithuania - Teo | TEOL | Fixed Line Telecom.
Nigeria - Diamond Bank | DBG | Banks
- Guaranty Trust Bank | GRTB.LI | Banks
Oman Pakistan - MCB Bank | MCBS | Banks
- Oil & Gas Development | OGDC | Oil & Gas Producers
- United Bank | UBLS LI | Banks
Poland - Bank Polska Kasa Opieki | BPKD | Banks
- Polski Koncern Naftowy Orlen | POKD | Oil & Gas Producers
- Telekomunikacja Polska | TPSD | Fixed Line Telecom.
Romania - A & D Pharma | ADPH | HealthCareEquip.&Ser
Tunisia - Banque Internationale Arabe de Tunisie | BIND | Banks
United Arab Emirates - Kingdom Hotel Investments | KHI | Leisure Goods
If you tallied-up the names above, you probably realize that there's more than 26. How do you say 'Doh!' in Romanian? In truth, the difference arises because the index will apply various liquidity and market-cap screens that we weren't able to apply using BoNY's tool. So, not every name listed above will make the cut. Dobrze? ('Ok?' in Polish, my mother tongue.) It's worth noting that a firm's shares must trade as depositary receipts on the London Stock Exchange, Luxembourg Stock Exchange, NYSE, Nasdaq, or Amex in order to qualify for the index. While the fund would technically invest in shares that are denominated in dollars, since depositary receipts are tied to the ordinary shares denominated in the home currency, any monies invested would be subject to currency gyrations. No word on how much the fund will cost. 'Not less than 0.64%' seems like as good a guess as any (that's the expense ratio that sibling Claymore/BNY BRIC levies).
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