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Tickers in this Article: ARGT, COPX, CU, EPOL, ESR, EWT, FRN, FTW, GREK, KOL, MES, PKOL, PLND, YAO
The FTSE Group, one of the leading indexing firms, recently announced the results of its Annual Country Classification Review, the process by which global equity markets are classified as Developed, Advanced Emerging, Secondary Emerging or Frontier using a scale of 21 Qualities of Market criteria.There were no reclassifications this year, but a couple more additions to the watch list of countries that are being considered for promotion or demotion between FTSE's market classifications. Below we profile the countries living on the edge, as well as the ETF options available to play them :

1. Argentina: Possible Demotion From Frontier

Argentina, which was demoted from Secondary Emerging to Frontier only two years ago, is once again being considered for possible demotion. The continuingstringent capital controls imposed on international investors and the lack of an independent regulatory authority to protect the rights of shareholders has put the FTSE on its guard for worse investment conditions to come. High inflation and poverty have plagued the economy for decades and the government has underestimated both effects for almost that long; without the help of independentassessments it has been hard for investors to know what they are in for with Argentina.

If you are looking for a way to gain exposure to this unpredictable investment, the FTSE Argentina ETF (ARGT) is exclusively invested in companies that have substantial revenues or assets in this country. Only about half of the fund is actually invested in companies listed in Argentina, with the remainder allocated to those listed on exchanges in places such as Canada, Italy and Chile that have significant operations in Argentina.

2. China A Share: Possible Inclusion as Secondary Emerging

The Chinese stock market is unique to foreigners (including U.S.-based investors) in that it has been dividend into separateshare classes. A Shares are in Chinese companies issued in China under Chinese law and exclude Hong Kong Stock Exchange (H Shares) and foreign-invested shares issued domestically (B shares), which are both currently listed as Secondary Emerging. Generally, only Chinese residents are able to invest in the 776 companies listed in Shanghai, and the 489 companies listed in Shenzhen that make up China A Share market.

Currently, there is only one U.S.-listed ETF that offers exposure to the Chinese A Share market: PEK. This ETF uses swaps issued by companies that have received special approval to hold Chinese A Shares. There are some nuances to accessing this potentially lucrative market; be sure to understand the ins and outs of A Share exposure before jumping in.

3. Greece: Possible Demotion to Advance Emerging

The question that continues to drive investors away from this once strong economy is whether Greece will be unable to recover at the same pace as other European economies and will ultimately exit theeurozone. Whileeurozoneleaders have stated how hard they are working toaccommodateGreece and prevent the country from falling deeper into recession, many believe the country will be unwilling to conform to strict austerityrequirements and opt to start over with the Drachma.

For investors who are looking to make it big by predicting Greece's recovery, the FTSE Greece 200 ETF (GREK) offers exposure to a wide range of companies that are either based out of, or make a majority of their revenues in, Greece.

4. Kazakhstan: Possible Inclusion in Frontier

As the last former Soviet country to declare independence only 21 years ago, Kazakhstan is a young country and still retains many of its communist era flaws, including economic and political monopolies by the current communist party in power. However, there have also been improvements in the banking, education and technology sectors far beyond former Russian standards and as a commodity-rich nation Kazakhstan may have huge potential as an investment opportunity.

While the FTSE might see potential in Kazakhstan, ETF issuers have yet to notice the investment opportunity and very few ETFs have any holdings in the country. As an alternative strategy, investors may try investing in mining funds,especially copper which is abundant in the country. Both the ISE Global Copper Index (CU)and Copper Miners (COPX) have minor allocations to Kazakhstan .

5. Kuwait: Possible Inclusion as Secondary Emerging

One of the major players in the global oil industry, Kuwait is also emerging as one of the most free economies in the Middle East with a booming stock exchange. Many investors are wary of investing in an economy so dependent on the price of oil, but Kuwait also offers some of the world's leading financial institutions, a valuable and strong currency, and some of the most attractive tourist destinations in the world. Recently, the beaches of Kuwait have become a vacation spot for the wealthiest of tourists.

There is no pure play Kuwait ETF, but there are a handful of funds with meaningful allocations. The Market Vectors Gulf States IndexETF (MES), for example, is invested in publicly-traded companies that are headquartered in Gulf Cooperation Council countries and holds a majority of shares in Kuwait financial corporations.

6. Mongolia: Possible Inclusion in Frontier

This mining and agriculturally rich nation was considered by most as a Frontier market before the economic crisis in 2008 rocked the prices of its most highly exported commodities andrevealedhow reliant the country was on foreign interest. Since then the government has worked on improvinginfrastructure, including encouraging the country's minimal stock market, which has quadrupled its total market capitalization since the economic crisis. While GDP is still mostly made up of mining and agricultural activities, this country has worked hard to prove it's once again worthy of global interest.

Must like the other countries being considered for Frontier inclusion there are not very many ETFs with holdings in Mongolia, and those that do only have at most 5% allocated to the country. LikeKazakhstan, the way to Mongolian investments is through the mining industry, which makes up 20% of the country's GDP. Funds like the Global Coal Portfolio (PKOL) and Market Vectors Coal ETF (KOL) have small allocations to the country.

7. Poland: Possible Promotion from Advanced Emerging to Developed

Considering Poland has only been a free market economy for 20 years, its economy is considered one of the healthiest post-communist countries and was the onlyEuropeaneconomy that successfully avoided the worst of the 2008 crisis. The original kick-start into capitalism was due to huge coal reserves, but since then Poland has become a leader in exporting electronics, cars, trains, planes and other modes of transportation.

There are a couple options out there for the ETF investor looking to gain exposure to Poland; both the MSCI Poland Investable Market Index Fund (EPOL)and Market Vectors Poland (PLND)offer pure plays on this growing economy.

8. Taiwan:Possible Promotion from Advanced Emerging to Developed

Taiwan is the last of the Four Asian Tigers to be considered an emerging market, with Hong Kong, South Korea and Singapore already classifiedas Developed by the FTSE. This export-driven economy has grown exponentially in the past 30 years as the government has pushed for once-privatized companies to be turned over to the citizens in a shift to capitalism.

Many investors have already benefited from Taiwan and there are many options for those who have yet to.Two ETFs are dedicated exclusively to this marked, including the MSCI Taiwan Index Fund (EWT)and Taiwan AlphaDEX Fund (FTW) .

9. Ukraine: Possible Inclusion in Frontier

After being slow to adapt more capitalistic market, Ukraine has emerged in the last 10 years as a growing industrial economy, exporting all types of transportation, including spacecrafts. While the infrastructure andbureaucracy are still working to catch up with emerging market standards, FTSE is considering the potential of the Ukraine growing as quickly as it has in the past.

There are not so many investment opportunities for exposure to the Ukraine. There are two options for investors, the Frontier Markets ETF (FRN) and MSCI Emerging Markets Eastern Europe Index Fund (ESR)have minimal exposure to the Ukraine.

Disclosure: No positions at time of writing.

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