The US 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, I thought it might be helpful to dig into these US funds’ portfolios to determine where exactly 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.

To me, the Sub-Saharan weights of the Market Vectors Africa ETF (AFK) and T. Rowe Price’s 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 US, 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.

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 (CAFRX) or other geographic regions (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.

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 (NAFAX).

You might consider the Wasatch Frontier Emerging Countries Fund if you’re less biased toward Africa and more concerned about geographic diversification.

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

Any takers?