As oil prices keep rising, stock markets in the Middle East are soaring. Meanwhile, the broad U.S. stock market remains in negative territory.

The result is a rush of sorts by exchange-traded fund sponsors to provide access to often-tiny yet fast-growing nations such as Morocco and Kuwait.

On Wednesday, the WisdomTree Middle East Dividend Fund (NasdaqGM: GULF) became the latest frontier-dominated ETF to launch. Just as significantly, perhaps, is that it's also the second such type of fund to choose the world's dominant oil-producing region as its focal point for investing.

Although not listed as a pure frontier markets play, some 80% of GULF's stocks are from markets fitting that category. The other 20% represent larger-and relatively poorer-performing-emerging markets constituents.

"Our main concern was to bring investors access to the Middle East's stock markets," said Jeremy Schwartz, deputy research director at WisdomTree Asset Management. "It just so happens that a lot of the Middle Eastern countries are considered frontier markets."

While much of the developed world is still slogging through recessionlike conditions, so-called frontier markets in the Middle East are flying high.

For example, Oman and Qatar are each up around 24% and Lebanon has gained 52% so far through Thursday, according to MSCI Indices. Even several bigger emerging markets in the Middle East are outperforming in U.S. dollar-weighted measures. Those include Morocco's 31.92% jump and Jordan's 16.52% increase.

A Misnomer?

The region's laggards are even looking relatively better than most larger and more-developed global markets. Egypt was down 4.58% as emerging markets worldwide slid an average of 18.42%.

"While the U.S. has been hurt by rising oil prices over the past three years, this region has been benefitting," said Schwartz. "The correlation between the U.S. and the Middle East is about the lowest in the world right now."

Last week, the PowerShares MENA Frontier Countries Portfolio (NasdaqGM: PMNA) hit the market. It's based on the NASDAQ OMX Middle East North Africa Index. And in mid-June, the Claymore/BNY Frontier Markets ETF (NYSEArca: FRN) launched.

It takes a more global approach than the other two ETFs. Besides Egypt (17.63%) and Kuwait (3.03%), FRN doesn't include significant stakes in the other six major Middle Eastern markets that GULF does. Other companies eligible for inclusion in WisdomTree's benchmark that guides its ETF are Bahrain, Jordan, Morocco, Oman, Qatar and the United Arab Emirates.

As a result, a more direct competitor for pure Middle Eastern exposure is PMNA. It also targets the same eight markets in the region as GULF. But it adds Lebanon to its portfolio. The Invesco PowerShares fund also comes with a more expensive price tag. It's expected to wind up with an annual expense ratio of 0.95% vs. GULF's 0.88%.

The two also differ in how their benchmarks are put together. PMNA uses a straight market-cap sizing methodology, although it modifies those weights a bit by putting a cap of 10 stocks from any one country being included at a time. Currently, it holds about 56 different names.

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