Frontier markets are the emerging markets of just a few years ago.

While investors of all stripes have poured into emerging markets raising expectations for returns, frontier markets, in developing countries, such as Nigeria, Kenya, Vietnam, Sri Lanka, Croatia, Romania, Qatar and Kuwait, tend to be volatile, but can generate better returns over time. That’s because they have high economic growth rates and small, relatively illiquid and undercapitalized equity markets.

On Tuesday, Northern Trust's asset management arm, Northern Trust Global Investments, launched a Frontier Markets index fund for institutional investors with exposure to under-represented regions such as Eastern Europe, Africa and the Middle East, as well as a Asia and the Americas.

“Sophisticated institutional investors understand the need for diversified international and emerging markets exposure,” said Bob Browne, Chief Investment Officer of NTGI, in a press release. “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 NTGI fund is benchmarked to the S&P Frontier Extended 150 Index and takes a diversified approach to the sub-asset class of emerging markets, Northern Trust said. The fund is offered to institutional investors in a collective trust fund structure to provide enhanced transparency, trading efficiency and institutional pricing for investors.

Northern Trust has more than $250 billion invested in index strategies.