On September 11, 2014, the Financial Industry Regulatory Authority issued an investor alert with regard to investing in frontier markets. Alerts like this are issued by FINRA to apprise investors of the risks of various types of investments. In this case, FINRA is concerned that investors not overlook the substantial risks of investing in frontier markets.
Frontier markets include countries like Lebanon, Nigeria, Vietnam, Slovenia and Argentina. Investing in frontier markets is more risky than investing in other international asset classes. In fact, the frontier markets asset class is probably the riskiest available to mutual fund and exchange-traded fund investors. It is one step beyond international emerging markets in terms of volatility.
