BCHP, which debuted in late April, is an equal weight ETF with each of 30 components garnering an allocation of 3.33%. Those 30 holdings include plenty of familiar companies based in the U.S. and other developed markets, such as Qualcomm (NasdaqGS: QCOM), Anheuser-Busch InBev (NYSE: BUD), Colgate-Palmolive (NYSE: CL), Las Vegas Sands (NYSE: LVS) and YUM! Brands (NYSE: YUM). [Blue Chips and Emerging Markets]
BCHP’s holdings derive anywhere from 26% to 100% of sales from emerging markets, according to Bloomberg.
Many investors know the temptation and disappointment of emerging markets, but the data confirm the validity of BCHP’s approach. Average revenue growth in multinational parent companies has been 8.8%, compared to 15.4% for multinational subsidiaries in developing markets while average profit growth has been 6.8% in multinational parent companies, compared to 14.7% in multinational subsidiaries in developing markets, according to EGShares data.
Due its developed market lineup, BCHP sports a valuation that is rich compared to most emerging markets. The ETF’s underlying index, the EGAI Developed Markets Blue Chip EM Access Index, has a trailing P/E of 19.5, according to issuer data. The MSCI Emerging Markets Index trades around 10 times earnings.
