The California State Teachers Retirement System will consider a focused frontier approach during its asset study next fiscal year, said Sherry Reser, spokeswoman. It has exposure to equities in Kazakhstan, Lebanon and Colombia through larger mandates. The Kansas Public Employees Retirement System is starting to research the area and Acadian Asset Management recently launched a frontier fund, which now has $157 million under management from 23 investors. Fifteen of them are institutions, including corporate plans, said Churchill Franklin, executive v.p.

Generally, a country is "frontier" if it has an active equities market but low market capitalization and trading volume. About 50 countries are considered frontier markets. Consultants are pushing frontier investing as well. Cynthia Steer, chief research strategist for Rogerscasey has been bullish for some time, but said investors have only recently "gotten it." Ennis Knupp + Associates is starting to do research in the area. It distributed a white paper to all its clients last month that explored the pros and cons of frontier markets. The markets have low correlation, high returns--with corresponding high risk--and many are undergoing regulatory reforms that make it easier for foreign investors to own securities, said Florence Mwaura, senior investment analyst and co-author of the piece.

Callan Associates, however, thinks clients can get access to frontier markets through broader emerging market or international equity strategies, according to Andy Iseri, international investment consultant. Most of the firm's research in the area has been on managers that invest in frontier markets, not on countries themselves. Most of the interest has come from the larger funds, but has been purely educational thus far, Iseri said.

The surge in awareness has, in part, followed the recent launch of indices, such as the MSCI Frontier Markets Index, the Merrill Lynch Frontier Index and Standard & Poor's/Independent Financial Concepts Group's Frontier Markets Composite Index. Those indices have spawned a handful of strategy launches. Barclays Global Investors and Franklin Templeton Institutional recently launched frontier funds, while Claymore Securities and Bank of New York Mellon rolled out the first frontier markets ETF together. Larry Speidell, cio at Frontier Asset Management, is in the process of developing a frontier fund with Marna Whittington, ceo and managing director for Nicholas-Applegate Capital Management. Charlemagne Capital, T. Rowe Price and Renaissance Investment Management offer regional strategies that cover frontier countries as well.

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