With spring finally approaching, many ETF providers are coming out of hibernation to launch a new wave of products on to the market. This trend is picking up steam in April, with New York-based Global X putting two more emerging market ETFs up for purchase.

However, these two new funds are a little bit off the beaten path, even for Global X, as they target some of the more exotic stock markets from around the globe. In fact, both are actually the first ETFs to target their respective markets, with NGE focusing in on Nigeria, and AZIA honing in on stocks from Mongolia and Central Asia.

This could make these funds a tough sell for some risk-adverse investors out there, but very interesting propositions for those seeking lower correlation markets that have impressive growth prospects. These are also probably markets that investors know very little about, so we have highlighted some of the key details about the two new funds below, for those seeking alternative emerging market plays in Q2:

Nigeria Index ETF (NGE)

Nigeria represents a large and untapped market in Western Africa for U.S. investors. The country is actually the largest by population in Africa, while it is also the biggest oil producer on the continent, so it clearly has economic potential (see Time for Frontier Market ETFs?).

This is especially true considering how young the population of Nigeria is, as close to two-thirds of the country is younger than 25. This incredible demographic profile suggests that Nigeria is poised to hit a ‘demographic dividend’ in the coming decades as this massive boom reaches their full earnings potential.

Obviously there are a great deal of risks in Nigeria as well, so investors should consider this a high beta play. Politics and regional strife are big problems, while corruption is also a major issue for the surging country.

In order to play this interesting economy, investors now have NGE, a fund that charges 68 basis points a year after waivers. This ETF looks to track the Solactive Nigeria Index which holds about 28 securities in its portfolio, weighted by modified free-float market capitalization (see 4 Best New ETFs of 2012).

The portfolio is heavy in financials at 41% of assets, while energy (24%) and consumer discretionary (13.1%) round out the top three. There are only three other segments represented (staples, industrials, and basic materials) so the portfolio could be pretty concentrated from an industry perspective.

Central Asia & Mongolia Index ETF (AZIA)

Central Asian economies have rebounded nicely after the fall of the Soviet Union, with many surging thanks to an incredible mineral wealth. The region has also become increasingly tied to China, as that nation continues to have an insatiable demand for commodities of all types.

In fact, according to the IMF via Global X, GDP growth is expected to be at least 5.5% for energy-exporting Central Asian nations, while others are projecting at least 14% growth for Mongolia on the year. Thanks to these surging economies and increased interest from China, many are expecting a bright future for these economies for quite some time.

However, investors should note that corruption is also an issue in many of these markets as well, a factor that could curtail growth. And while diversification efforts have been made, the economies remain laser-focused on Chinese demand and mineral production for economic strength, factors that have worked out in the past, but may not always continue to do so (see 3 Emerging Market ETFs Protected from Global Events).

To play these countries in ETF form, investors can purchase AZIA, an ETF that charges 69 basis points a year while following the Solactive Central Asia & Mongolia Index. In total, the ETF holds just 22 stocks in its portfolio, investing in firms that derive revenues or are traded in any of the following nations; Mongolia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

This focus results in a portfolio that has roughly 46% of its assets in Kazakhstani firms, with Russia (14%), Mongolia (14%), and Turkmenistan (5.9%) rounding out the top four. Many developed markets follow these, suggesting that the index’s stipulation of ‘derive revenues in these nations’ is pretty important to this ETF.

In terms of exposure, basic materials stocks account for the biggest industry at 43% of assets. Energy isn’t too far behind though at 37%, while financials and telecoms round out the rest with about 9.5% each. In other words, the fund is very concentrated into a few key segments, suggesting a heavy level of sector risk.

How do they fit in a portfolio?

These ETFs both represent very interesting complements to a portfolio that is heavy in either domestic securities or big emerging market ETFs like EEM or VWO. Both Nigeria and many Central Asian nations are not represented in either of the aforementioned ETFs, so investors do not have to worry about overexposure or less diversification (see Emerging Market ETFs: EEM vs. VWO).

These funds will likely be very volatile though, and could be heavily impacted by trends in a few key sectors such as financials, oil, and basic materials. Furthermore, there are always political issues to consider in these markets, so there could be a bit of a risk premium present for these securities.

Still, growth could be enormous in these products, especially if recent risk-on trends in equities continue. These are, after all, some of the riskiest and most ‘frontier’ markets out there, so they could be big winners in a bull market environment.

Can they succeed?

I have been skeptical about small or exotic markets succeeding in the U.S. ETF world, but this has been proven wrong before. Global X’s very first product, GXG, targets Colombia and has seen a big surge in interest over the years. More recently, EPHE for the Philippines has been a hot fund, accumulating more than $400 million in AUM.

While it might not appear that these two examples have much in common besides solid asset growth, they have actually both been strong performers, crushing broad markets over medium time frames. This outperformance is the real key to generating interest in small markets, and it will likely be necessary once more in the case of the Nigeria ETF and the Central Asia & Mongolia ETF (see Zacks Top Ranked Emerging Market ETF).

Beyond that though, there is always the first-mover advantage which also could help these products succeed. This could be particularly true if commodity prices rebound, potentially putting riskier-- but natural resource focused-- funds like NGE and AZIA in the limelight, and onto investors' radars.

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Author is long VWO.