Seeking new frontiers with your investment portfolio? Then why not take a trip to a select group of emerging markets offering refuge from the recent slide in most global markets? It may surprise you, but stock markets in places such as Chile and Colombia actually are red hot.

One way to invest in these emerging markets and to gain diversification at the same time is to buy an exchange-traded fund (ETF) that gives you exposure to a variety of countries through a single purchase. One such fund is the Claymore/Mellon Frontier Markets ETF (FRN). This fund seeks investment results that correspond generally to the performance, before fees and expenses, of an equity index called The Bank of New York Mellon New Frontier DR Index.

This ETF normally invests at least 80% of its total assets in American depositary receipts (ADRs) and global depositary receipts (GDRs) that comprise the index. The fund also seeks to invest at least 80% of its total assets in securities of issuers from so-called Frontier Market countries. Using a low-cost indexing investment approach, the ETF tries to replicate the performance of the Frontier Index, which consists of countries that are chosen based on an evaluation of their gross domestic product growth, per capita income growth, past and expected inflation rates, privatization of infrastructure and social inequalities.

The Claymore/Mellon Frontier Markets ETF is not as diversified as many international ETFs, so just be aware that it plays clear favorites among the countries and sectors that it tracks. The geographic weightings of the fund are somewhat concentrated on three countries: Chile, 31.31%; Egypt, 14.51%; and Colombia, 12.33% (as of June 30).

Those likely are not the countries where you or most investment advisers usually focus, but for that reason they offer a way to avoid moving in lock-step with other markets around the world. Such non-correlation is a good approach to reduce the risk in your investment portfolio. The fund’s sector concentration is led by financials, with 39.87%; utilities, 14.01%; energy, 13.67%; telecommunications services, 10.53%; and materials, 9.54% (also as of June 30). The focus seems to be working, based on the chart here of the ETF’s performance during the past year.

If you want advice from me about which ETFs to buy and to sell, I encourage you to sign up for my ETF Trader service by clicking here. As always, I am pleased to answer any of your questions about ETFs, so do not hesitate to contact me. To send your question, simply click here. You may just see your question answered in a future ETF Talk.