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The U.S. investment community is waking up to the African growth story. As a result, an increasing number of mutual funds and ETFs now boast significant African stock holdings.

But Africa is not a country. It's a diverse continent with a myriad of different cultures, leaders, resources, and economies.

So, for the sake of comparison, I thought it might be helpful to dig into these funds' portfolios to determine where they are placing their bets.

Investing in the Sub-Sahara

The table below lists 11 funds ranked according to their degree of sub-Saharan African exposure.

Fund NameTickerSub-Saharan WeightPortfolio Date
iShares MSCI South Africa IndexEZA100.0%11/13/12
SPDR S&P Emerging Middle East and AfricaGAF91.3%11/13/12
Commonwealth Africa FundCAFRX84.6%7/31/12
Nile Pan Africa FundNAFAX84.5%6/30/12
Market Vectors Africa Index ETFAFK59.2%11/13/12
T. Rowe Price Africa & Middle EastTRAMX46.2%7/31/12
Wasatch Frontier Emerging Small Countries FundWAFMX32.4%6/30/12
Templeton Frontier MarketsTFMAX23.2%6/30/12
HSBC Frontier Markets FundHSFAX17.5%9/30/12
iShares MSCI Frontier 100 Index FundFM15.5%11/14/12
Harding Loevner Frontier Emerging Markets PortfolioHLMOX14.5%4/30/12

To me, the Sub-Saharan weights of the Market Vectors Africa ETF and T. Rowe Price's (MUTF:TRAMX) are the table's biggest surprises.

How is it that these two Africa funds deploy only half of their assets to sub-Saharan stocks?

Well, AFK invests heavily in North Africa and in companies that do business in Africa but which are domiciled in the U.S., Europe, or Australia. The same goes for TRAMX, but, unlike AFK, it also invests in Middle Eastern stocks. Now, let's check out the sectors that each fund invests in.

Screening Out the Mining and Oil Plays

I've often noted that I'm not a fan of mining and oil stocks. I see the most long-term, sustainable growth in sectors with more direct exposure to the African consumer -- banking, retail, and construction.

The following chart measures the exposure of each fund to sub-Saharan listed stocks excluding those mining and oil companies.

Fund NameTickerSub-Saharan Weight (excluding Mining and Oil)
iShares MSCI South Africa IndexEZA73.6%
Nile Pan Africa FundNAFAX72.5%
SPDR S&P Emerging Middle East and AfricaGAF68.2%
Commonwealth Africa FundCAFRX51.9%
Market Vectors Africa Index ETFAFK43.1%
T. Rowe Price Africa & Middle EastTRAMX38.7%
Wasatch Frontier Emerging Small Countries FundWAFMX32.2%
Templeton Frontier MarketsTFMAX22.9%
HSBC Frontier Markets FundHSFAX17.5%
iShares MSCI Frontier 100 Index FundFM15.5%
Harding Loevner Frontier Emerging Markets PortfolioHLMOX13.8%

Now we see some real separation between the funds that give their investors exposure to the rise of an African middle class (EZA, NAFAX, GAF) and those that bet heavily on natural resources (MUTF:CAFRX) or other geographic regions (MUTF:HLMOX). But let's dig still deeper.

Who's Investing In Frontier Africa?

Clearly, many of these funds invest heavily in South African stocks. South Africa, with its relatively developed infrastructure, and slower economic growth rate may not offer the same ground floor investment opportunity that faster growing countries like Nigeria and Kenya do. This next table screens out South African stocks from each fund's portfolio to determine which one invests most heavily in rising incomes in the African frontier.

Fund NameTickerSub-Saharan Weight (excluding South Africa, Mining, and Oil)Frontier African Countries Represented
Nile Pan Africa FundNAFAX25.1%Nigeria, Ghana
Wasatch Frontier Emerging Small Countries FundWAFMX23.9%Nigeria, Kenya, Ghana, Namibia
Market Vectors Africa Index ETFAFK20.8%Nigeria, Kenya
Templeton Frontier MarketsTFMAX18.9%Nigeria, Kenya, Zimbabwe, Mauritius, Ghana, Malawi
HSBC Frontier Markets FundHSFAX17.5%Nigeria, Kenya
iShares MSCI Frontier 100 Index FundFM15.5%Nigeria, Kenya, Mauritius
Harding Loevner Frontier Emerging Markets PortfolioHLMOX13.8%Nigeria, Kenya, Ghana, Mauritius, Senegal
T. Rowe Price Africa & Middle EastTRAMX10.7%Nigeria, Ghana, Zambia
Commonwealth Africa FundCAFRX4.0%Nigeria, Kenya
iShares MSCI South Africa IndexEZA0.0%
SPDR S&P Emerging Middle East and AfricaGAF0.0%

So, there you have it. If you are in the market for an Africa-focused mutual fund with significant exposure to frontier markets, then you should take a close look at the Nile Pan Africa Fund (MUTF:NAFAX).

You might consider the Wasatch Frontier Emerging Countries Fund (MUTF:WAFMX) if you're not so much an Africa investor as you are a frontier investor concerned about adequate exposure to the continent's smallest markets.

The bigger revelation for me, however, is that there appears to be an excellent opportunity to launch a frontier Africa fund.

Any takers?

Disclosure: I am long AFK, EZA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.