The EGShares Emerging Markets Consumer ETF (NYSEArca: ECON), the oldest exchange traded fund focusing on the emerging markets consumer, celebrated its fifth anniversary Monday. More importantly, ECON can celebrate more success than traditional emerging markets ETFs in 2015, to this point a rough year for developing world equities.
Year-to-date, ECON is down 7.9% while the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), the largest emerging markets ETF by assets, is lower by 10.4%.
Emerging markets investing, including doing so with ETFs, is changing, presenting investors with opportunities to take more tactical, thematic approaches to tap into the rise of developing world consumers. With many traditional emerging markets ETFs either too concentrated in the BRIC nations, excessively exposed to state-run enterprises or both, investors should rethink how they access emerging markets consumer trends. [India Consumer ETF]
The ETF’s “consistent performance has contributed to ECON earning a five-star Overall Morningstar Rating™ among 561 Diversified Emerging Market ETFs and open-end funds as of September 30, 2015 based on risk-adjusted returns,” according to a statement from EGShares.
ECON’s underlying countries are heavy commodity exporters and are suffering under the currently weak commodities market. For instance, South Africa’s miner strikes have cut down its metals exports, uncertainty in Brazil has weakened the economy, and Chile’s large copper industry has been pressured by the drop in base metal prices. South Africa, Brazil and Chile combine for over 38% of ECON’s weight, according to issuer data.