(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

• BLOM Bank | BLBD | Banks

Lithuania

• Teo | TEOL | Fixed Line Telecom.

Nigeria

• Diamond Bank | DBG | Banks
• Guaranty Trust Bank | GRTB.LI | Banks

Oman

• BankMuscat | BKM | Banks

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).

I'm looking for an ETF or mutual fund specifically focused on the PERSIAN GULF/United Arab Emirates. Any suggestions???? Thanks  

Hi yargneb.

I'd posted a reply a few days ago to a similar question you'd posed in a separate thread. It's here.

Let me know if you have any other questions.

Regards,

Jeff Ptak

Morningstar, Inc.

Hi again yargneb.

Thought you'd be interested to know that PowerShares just registered an ETF along the lines of what you'd inquired about. It'll invest in the stocks of companies based in 10 middle eastern and north African countries.

Here's a posting I just made about the forthcoming PowerShares ETF.

Regards,

Jeff Ptak

Morningstar, Inc.

TRAMX - TRPrice Africa and Middle East.  I have the faith in this fund and this concept.  Where do you think all that 110/gallon oil money is ending up?

Speaking of Claymore:

Do they provide NAV evaluations thoughout the day?
Somebuddy said that (most) ETFs do provide that info
... but I can't hardly find such for Claymore stuff (like EEB).

Anyway, I had to generate my own, here
... which may (or may not!) be useful:
http://www.gummy-stuff.org/ETF-NAV.htm

After consulting with my Romanian wife, the Romanian equivalent of "Doh!" would be:

"Ce pula sunt!" -  (what literally translates to: "I'm such a d*ck!")

However, my wife and her family are actually of Hungarian ethnicity (a significant ethnic group in Romania), and they added that the Hungarian equivalent of "Doh!" is "Baszd meg"! (Screw it!). Lesson here is that simple exclamations amount to something more profane in other cultures. I think that is a pretty good analogy about investing in the frontier markets. Volatility and extremes.

[quote user="M*_Jeffrey"]

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.)