About The Claymore/BNY Mellon Frontier Markets ETF (FRN)

The Claymore/BNY Mellon Frontier Markets ETF (FRN) started trading in mid June 2008. The ETF tracks the Bank of New York Mellon New Frontier DR Index, minus expenses and fees. FRN takes a replication approach to tracking the index, attempting to own all of the index's components. At times, however, the fund may use a sampling approach to track the index, and may hold futures or other derivatives.

Frontier markets have been referred to as the next generation of emerging markets and may potentially offer attractive risk and return ratios, as well as lower correlations to developed and emerging markets. FRN makes it possible for investors to efficiently access up to 41 countries in the very early stages of their development.

As of July 2008, the index had the follow sector breakdown:

Basic materials 14.85%
Consumer cyclical 0.89%
Consumer staples 4.68%
Energy 10.55%
Financials 39.42%
Industrials 6.87%
Telecommunication 14.68%
Utilities 8.07%

The ETF is passively managed, with an expense ratio of 0.65%. The expense ratio is capped at 0.65% until the end of 2010, after which it may be higher.

As of August 2008, the Claymore/BNY Mellon Frontier Markets ETF held 48 stocks with the following nation breakdown:

Poland 23.64 %
Chile 20.36 %
Egypt 17.63 %
Kazakhstan 7.67 %
Peru 5.47 %
Lebanon 3.37 %
Nigeria 3.24 %
Czech 3.24 %
Kuwait 3.03 %
Pakistan 3.01 %
Oman 2.28 %
Colombia 2.02 %
Ukraine 1.90 %
Bahrain 1.42 %
United Arab Emerites 0.89 %
Georgia 0.61 %
Estonia 0.22 %

All Potential countries for inclusion in the Index include Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, United Arab Emirates, Egypt, Ghana, Kenya, Malawi, Mauritius, Morocco, Nigeria, Tunisia, Zimbabwe, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Kazakhstan, Latvia, Lithuania, Poland, Romania, Slovak Republic, Slovenia, Ukraine, Bangladesh, Pakistan, Papua New Guinea, Sri Lanka, Vietnam, Peru, Chile, Colombia, Ecuador, Jamaica, Panama and Trinidad & Tobago. The Bank of New York Mellon New Frontier DR Index includes only companies with float-adjusted market capitalizations of more than $100 million that have depositary receipts that trade on U.S. exchanges or the London Stock Exchange.

FRN is listed on NYSE Arca and trades the same way as shares of a publicly traded company. FRN and other Claymore ETFs can be purchased through most brokerage accounts. They can be bought and sold throughout the day on the NYSE Arca or the American Stock Exchange, depending on the ETF listing, during normal trading hours. The Fund issues and redeems shares at NAV only in large blocks of 80,000 shares (each block of Shares called a "Creation Unit") or multiples thereof. Only broker-dealers or large institutional investors with creation and redemption agreements and called Authorized Participants ("APs") can purchase or redeem these Creation Units.


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Sources :

1. PR-inside.com: Claymore Launches First Frontier Markets ETF (FRN) In U.S., June 12, 2008 17:08:36
2. ETF ETN Review: Claymore/BNY Mellon Frontier Markets ETF (FRN), August 12, 2008 at 2:56 PM

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