invest there indirectly through what is called an access product—a derivative investment designed to mimic the performance of that country’s stock market. Although one does not actually own shares of Saudi Arabian stocks, one’s investment rises or falls based on how those stocks perform.

Another way to tap into frontier markets is by purchasing American depositary receipts (ADRs) or their foreign equivalents, global depositary receipts (GDRs). Depositary receipts essentially allow an investor to buy equity in a foreign company through a U.S. or European stock exchange. Exchange-traded funds (ETFs) have also begun to focus on frontier markets. Even some mutual funds now specialize in frontier-market stocks, offering the advantage of spreading risk across multiple countries or regions.

Developed economies, though more closely correlated with the U.S., can also offer excellent investment opportunities, provided that investors carefully choose companies rather than investing in, say, an index that simply gives them exposure to a particular region. Many companies in industrialized European or Asian countries have done more than their U.S. counterparts in recent years to reinvest capital in new capacities and to expand into new markets.

One example is Volkswagen’s success in purchasing the Czech automaker Skoda, which has given the German company a new source of growth as it capitalizes on lower labor costs in Eastern Europe. Similarly, Japanese companies such as Honda and Sony have expanded distribution and manufacturing agreements in China. Although a number of major U.S. manufacturers are pursuing some of these same opportunities, the trend in recent years in other developed regions such as Europe and Asia has been more robust.