As the emerging market grows, a rising middle class and increased spending power could bolster the consumer market. Investors can tap into this expanding area through a targeted emerging market sector-related exchange traded fund.
On the upcoming webcast, The Emerging Markets Consumer is Online, Kevin Carter, Founder of EMQQ Index, and Richard Kang, Advisor for EMQQ Index, will take a look at developing economies, with a specific focus on e-commerce and internet companies as a way to target the growing consumer base.
ETF investors can gain exposure to this targeted emerging market segment through the Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ), which focuses on internet names, notably those that cater toward online shopping or e-commerce.
The internet and e-commerce ETF tries to reflect the performance of the EMQQ The Emerging Markets Internet & Ecommerce index, which targets companies that derive their profits from e-commerce or internet activities, which include search engines, online retail, social networking, online video, e-payments, online gaming and online travel.
EMQQ includes exposure to the growth of online consumption in the developing world. Specifically, the ETF includes large internet names like Alibaba Group Holdings 9.3%, Tencent Holdings 8.3%, Naspers TLD 7.2%, Naver Corp 6.3% and Baidu Inc. 6.2%. The fund also has diverse country exposure, including India, China, Brazil, Turkey, Nigeria and Indonesia.
The e-commerce ETF will provide exposure to a growing consumer base. According to EMQQ, the consumer class will sell to 4.2 billion people by 2025, with consumption in the developing countries accounting for $30 trillion or almost half the global total.
Consequently, investors may find attractive revenue growth and value creation through the rising e-commerce segment.
“The revenue of the companies in EMQQ grew from $13 billion in 2009 to $73.8 billion in 2014—a total 5 year growth of 468% and an average annual growth rate of 41.5%,” according to EMQQ. “And while the rate of revenue growth is likely to slow over time, it was still an impressive 39.9% in 2014.”
Financial advisors who are interested in learning more about the emerging markets can register for the Tuesday, September 27 webcast here.