Investing in the emerging markets consumer theme has previously been a tricky bet. What appears to be a fundamentally sound story has not been a guarantee of positive returns in recent years.
However, the fundamental story remains in place and exchange traded funds offering exposure to the emerging markets have been performing well as of late. Buoying the case for these ETFs going forward is the sense of optimism felt by consumers in some of the largest emerging markets.
The EGShares Emerging Markets Consumer ETF (NYSEArca: ECON), the king of emerging markets consumer ETFs, has been a solid performer among emerging markets funds this year.
While ECON includes many high-quality consumer brands, most of the fund’s components are domiciled in countries that are experiencing greater currency volatility, indicating the ETF has been vulnerable to the severe downturn in emerging currencies this year.
Still, some compelling data and commentary indicate it could be time for investors to revisit ETFs such as ECON. Recovering emerging economies bolster the case for ETFs such as ECON.