We have all heard about the growth potential that emerging markets may generate as they quickly develop their economies and catch up to developed countries. However, Carter pointed out that U.S. investors’ average emerging market allocation only makes up 3.5% of their total portfolio exposure.

Moreover, when investors include emerging market exposure, they are still underexposed to consumer sectors, areas that show the greatest potential. For instance, the average weight of consumer sectors in widely observed emerging market benchmarks from the likes of MSCI and FTSE include about 17%. Consequently, the average U.S. investor likely only has about a 0.59% exposure to emerging market consumer sectors.

Carter argued that investors should put a greater emphasis on the emerging consumer sectors as they will help drive growth ahead on improving fundamentals. For example, smartphones are becoming a facet of everyday life, the shift has affected consumption as more forgo traditional brick-and-mortars for online retail sites. Driving this push toward online shopping, the growth of affordable access to broadband has permeated through the developing countries. Additionally, a number of quickly growing online retailers have established themselves across the emerging markets, including Alibaba, 58.com, MercadoLibre, Yandex and makmytrip.com, among others.

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.

David Gatti, Chief Executive Officer, Chief Investment Officer and Founding Partner of RPg Family Wealth Advisory, also pointed out that this e-commerce-focused ETF has helped investors outperform broader emerging market investments. For example, EMQQ has returned 40% year-to-date, whereas the widely observed MSCI Emerging Market Index has gained about 19%.

Financial advisors who are interested in learning more about the emerging market consumer industry can watch the webcast here on demand.