Fund managers have sounded a note of warning frontier-market ETFs as a means to invest in small, immature equity markets, Asian Investor reports. A panel of fund managers and ETF providers at a summit in Hong Kong mentioned low liquidity, low volumes and lack of transparency as major problems for ETF issuers.
ETFs may not reflect the accurate performance of frontier markets, whose illiquidity makes it hard to physically replicate their performance via tracker funds. Investors can benefit by purchasing ETF shares if the price is too less or selling if it is too high.
Click here for the story from Asian Investor.