iShares MSCI Frontier and Select EM ETF (FM)

ETF iShares MSCI Frontier and Select EM ETF (FRN) - Overview

Profile:

The iShares MSCI Frontier and Select EM ETF (FRN) is a passively managed ETF that tracks the performance of the MSCI Frontier & Select Emerging Markets 100 Index. This index includes stocks of small and mid-cap companies located in frontier and select emerging markets. The ETF invests primarily in equities across various sectors, including financials, materials, and energy.

Objective:

The primary investment objective of FRN is to provide investors with long-term capital appreciation by tracking the performance of the MSCI Frontier & Select Emerging Markets 100 Index. This ETF is suitable for investors seeking exposure to the growth potential of frontier and select emerging markets.

Issuer:

The issuer of FRN is iShares, a leading provider of exchange-traded funds (ETFs) globally. iShares is a subsidiary of BlackRock, Inc. (BLK), the world's largest asset manager.

Reputation and Reliability:

iShares has a strong reputation in the ETF industry, known for its large fund size, diverse product range, and robust research capabilities. BlackRock, its parent company, is also a highly respected and reliable financial institution with a long history of managing assets.

Management:

iShares ETFs are managed by experienced investment professionals at BlackRock. The FRN portfolio is overseen by a dedicated team of portfolio managers with expertise in emerging market equities.

Market Share:

FRN has a small market share within the emerging markets ETF category, but it is the largest ETF focused specifically on frontier markets.

Total Net Assets:

As of October 26, 2023, FRN has approximately $1.42 billion in total net assets.

Moat:

FRN's competitive advantages include its access to BlackRock's extensive research and analytical resources, its focus on a niche market segment, and its low expense ratio.

Financial Performance:

FRN has historically delivered competitive returns, outperforming its benchmark index in several periods. However, it is important to note that past performance is not a guarantee of future results.

Benchmark Comparison:

FRN's performance has been closely tracked against the MSCI Frontier & Select Emerging Markets 100 Index. While there are deviations in short-term performance, the ETF has generally mirrored the index's movements.

Growth Trajectory:

Frontier markets are expected to experience strong economic growth in the coming years, driven by factors such as population growth, urbanization, and rising middle-class incomes. This could positively impact the performance of FRN over the long term.

Liquidity:

FRN has an average daily trading volume of approximately 200,000 shares, indicating sufficient liquidity for most investors.

Bid-Ask Spread:

The bid-ask spread for FRN is typically narrow, around 0.05%, indicating low transaction costs.

Market Dynamics:

The performance of FRN is influenced by factors such as global economic conditions, political stability in emerging markets, commodity prices, and investor sentiment.

Competitors:

FRN's main competitors include VanEck Vectors Emerging Markets Small-Cap ETF (EMXC) and iShares MSCI Emerging Markets Small Cap ETF (EEMS).

Expense Ratio:

FRN has an expense ratio of 0.80%, which is considered relatively low compared to other emerging markets ETFs.

Investment Approach and Strategy:

FRN passively tracks the MSCI Frontier & Select Emerging Markets 100 Index, investing in the same proportions as the index constituents. The ETF primarily holds equities, with a small allocation to cash equivalents.

Key Points:

• Focuses on frontier and select emerging markets
• Low expense ratio
• Access to BlackRock's research and resources
• Potential for long-term capital appreciation

Risks:

• High volatility
• Concentration in small and mid-cap stocks
• Political and economic risks associated with emerging markets

Who Should Consider Investing:

FRN is suitable for investors with a high tolerance for risk and a long-term investment horizon. Investors seeking exposure to the growth potential of frontier and select emerging markets may consider this ETF.

Fundamental Rating Based on AI:

Based on an analysis of the factors discussed above, FRN receives a fundamental rating of 7.5 out of 10. This rating considers the ETF's low expense ratio, strong issuer backing, and potential for growth in frontier markets. However, investors should be aware of the risks associated with emerging markets, including high volatility and political instability.

Resources and Disclaimers:

This analysis is based on information from the following sources:

• iShares website: https://www.ishares.com/us/products/etf-product-detail?prod_name=ishares-msci-frontier-select-em-etf&siteEntryPassthrough=true
• BlackRock website: https://www.blackrock.com/us/individual/products/etfs/ishares-msci-frontier-select-em-etf
• Morningstar: https://www.morningstar.com/etfs/arkk/quote

This analysis is for informational purposes only and should not be considered investment advice.