Predictably, China plays a pivotal role in charting ECON’s course. The country is the ETF’s second-largest country weigh at 16.3%. That has been advantage even as some Chinese consumer-related shares have disappointed this year.
“The Chinese consumer market has grown to now 27 percent the size of the U.S. market, up from 8 percent in 2001. In just 2012 alone, China’s private consumption grew by $400 billion. Additionally, China’s wages have tripled in the last decade,” according to Reed Walters of Sector Capital Management.
The knock on emerging markets consumer stocks is valuation. The S&P 500 trades around 16.7 times forward earnings while the MSCI Emerging Markets Index is far less expensive at 10.7 times earnings. ECON’s trailing P/E ratio is nearly 24, according to EGShares data.
EGShares Emerging Markets Consumer ETF
Tom Lydon’s clients own shares of ECON.