If there's a last frontier for U.S. investors, it's Africa. The world's second-most populous continent is an afterthought for anyone looking to construct a diversified portfolio of foreign stocks.
Consider that there are just two mutual funds specializing in African stocks, compared with more than 100 focusing on Europe. About three dozen focus on a single country, China. So much for the vast African continent and its underground wealth from oil, minerals and metals.
Another sign of Africa's low profile is the dearth of information about the stocks of its top publicly traded companies. Check the business pages of a newspaper or an investing website, and it's relatively easy to find data on the performance of indexes from most foreign countries or regions. But you'll probably have to look elsewhere to find references to the few African indexes, such as the MSCI Emerging Frontier Markets Africa or the Dow Jones Africa Titans 50.
"It's probably the world's last great untapped market," says Derrick Irwin, co-manager of the Wells Fargo Advantage Emerging Markets Equity fund.
Unlike the two Africa-focused funds, Irwin's fund is geographically diversified, owning stocks across a broad swath of the world's fastest-growing economies.
He sees growing opportunities in African stocks as well as foreign companies that do business on the continent, and it's not just because of its well-known natural resources. He sees the greatest potential in its 1 billion people and the expansion of Africa's middle class.
One indicator of that potential: Nigerian sales of Guinness beer now surpass those in Ireland, despite the dry stout's origins in Dublin. That's made Africa's most populous country a key growth market for Guinness parent Diageo, based in Britain.
Many investors have been scared off by Africa's widespread poverty and its seemingly intractable political instability and corruption. In North Africa, the Arab Spring uprisings that began a couple of years ago helped several countries move toward democracy. But turmoil persists in countries such as Egypt, making them unattractive to potential investors.