Northern Trust's asset management arm, Northern Trust Global Investments, has launched a frontier markets index fund.

The fund seeks to provide institutional investors with exposure to under-represented regions such as Eastern Europe, Africa and the Middle East, as well as a broadened opportunity set in Asia and the Americas.

"Sophisticated institutional investors understand the need for diversified international and emerging markets exposure," says Bob Browne, chief investment officer of Northern Trust Global Investments. "Our new index fund offers investors the opportunity to expand their asset allocation beyond developed and emerging markets to the next 'frontier' of capital investment in a highly disciplined and risk managed framework."

The fund is benchmarked to the S&P Frontier Extended 150 Index and takes a diversified approach to the sub-asset class of emerging markets.

Frontier markets are developing countries, such as Nigeria, Kenya, Vietnam, Sri Lanka, Croatia, Romania, Qatar and Kuwait, that have high economic growth rates and small, relatively illiquid and undercapitalised equity markets.

The index strategy is offered to institutional investors in a collective trust fund structure to provide enhanced transparency, trading efficiency and institutional pricing for investors.

"NTGI's frontier markets strategy is designed to offer diversified exposure that takes into account the real world challenges of investing in these markets," says Greg Behar, senior investment strategist for Northern Trust's global quantitative management group. "With this strategy added to our line-up, Northern Trust now provides the complete global equity index opportunity set to institutional investors."