Though not a pure consumer ETF, EMDD does allocate a combined 56.6% of its weight to staples an discretionary sectors. The weight to those sectors is important because consumer sectors have been key contributors to emerging markets earnings growth in recent years.
“Emerging market consumer sectors have delivered higher earning growth in four of the last seven years when compared to the broader emerging market equity index. Although earnings have disappointed over the last two years, we believe this should be a temporary relapse since consensus earnings are forecast to rebound in 2014 and 2015. Based on these estimates, EGA calculates that the EM consumer sectors would deliver earnings growth of 4.1% in 2014 and 16.2% in 2015, respectively, surpassing the rates of growth offered by the overall emerging markets index (3.8% in 2014 and 9.0% in 2015),” according to EGShares.
South Africa, China and Mexico combine for over 55% of EMDD’s country weight. The ETF’s index has an impressive dividend yield of almost 3.4%. [Top EM Consumer ETFs]
EM Consumer Fundamentals
Table Courtesy: Emerging Global Advisors
Tom Lydon’s clients own shares of EEM.