They hate them so much they delisted the ETF that’s been around since 2012.
And for good reason.
Had you bought the iShares MSCI Frontier 100 Index ETF (FM) when it was first issued back in September of 2012 and held it this entire time, you would have made no money.
Literally zero return since it was issued.
I actually may have been the only person who looked at this ETF every week.
And what a time to delist this thing – right before investors need it the most.
“Delisting” Is Good Information
Delisting an ETF is a lot like the Magazine Cover Indicator.
It’s good information
That’s especially true when it’s an ETF that’s been around for a long time, like this one:
By the time the fund family decides it’s just a waste of money, and it’s not worth keeping alive, they kill it.
But this is a serious process.
They don’t just delist things and call it quits for no reason. It needs to really be a bad scenario.
And this was an iShares ETF, which is run by BlackRock – the biggest fund family with the most money and who can afford to have the most patience.
Global X delisted its Next Emerging & Frontier ETF (EMFM) in May 2024.
The Invesco Frontier Markets ETF (FRN) was delisted way back in 2020.
They’re all gone.
You can’t get that kind of exposure to many of the Latin American countries, Asia, Africa, even Northern Europe.
This was it.
FM gave investors exposure to these Frontier Markets, which are pre-emerging.
In other words, these are usually small countries with illiquid stock markets composed of thinly traded stocks.
They’re normally too small to be considered an Emerging Market.
Frontier Markets are places like Argentina, Vietnam, Croatia, Egypt, Kazakhstan, Lithuania and Nigeria.
More developed Emerging Markets include countries like China, India, Taiwan, Poland, Mexico and Brazil.
And now the Frontier Markets ETF is gone. Just when you need it the most.
This isn’t the first time we’ve seen this pattern.
In fact, delistings often signal major turning points.
Get the Brazilian
My favorite way to play Frontier Markets has been through stocks in Latin America.
There are a bunch of them down there.
But, to be clear, LatAm has plenty of both emerging and frontier markets.
And we like both.
You can see the historic returns just over the past few months from countries like Chile, Mexico, and Brazil – a mix of both emerging and pre-emerging Frontier Markets.
The iShares Latin America 40 ETF (ILF) is up almost 20% since the “powers that be” stopped letting you invest in Frontier Markets:
We saw this when they delisted the VanEck Vectors Coal ETF (KOL) at the end of 2020, just before one of the most epic runs in the history of coal stocks:
Or the parabolic move in cocoa, immediately after they delisted the iPath Bloomberg Cocoa Subindex ETF (NIB):
These aren’t coincidences.
When Wall Street completely gives up on providing an investing vehicle for an asset class, it’s time to pay attention.
This is evidence of extremes in sentiment.
And we’re seeing other data suggesting the same thing.
We want to be in both Frontier and Emerging markets – particularly in Latin America.
Brazil is one way to do that, with the Brazil ETF currently working with some of its highest short interest in its more than 20-year history.
More than 34% of the float is currently short.
We’re looking to buy stocks with exposure to Brazil and Latin America.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs