While the Federal Reserve continues to raise interest rates at an aggressive pace, the U.S. dollar rises, and the global economy faces a possible recession, emerging markets are showing a surprising resilience. After facing financial trouble for decades, fast-growing middle-income countries like Brazil, India, and Indonesia have been weathering the storm (or, in the current environment, storms).
Despite China’s economic slowdown and Russia’s ostracization from global markets, the International Monetary Fund estimates that emerging market economies will significantly outgrow developed markets next year. In fact, there’s already evidence of this. In September, India overtook the U.K. as the world’s fifth-largest economy. And while the euro, pound, and yen are falling against the dollar, the Indian rupee and Indonesian rupiah have managed a more graceful decline, and the currencies of Brazil and Mexico have risen.
“The resilience of the emerging world is in part a story of maturation. Since the crises of the 1980s and 1990s, local financial markets have grown deeper and banks better managed. Policymaking has improved,” according to The Economist. “Officials have learned the hazards of careless budgeting and large current-account deficits. Central banks are more independent, and have adopted the inflation-targeting approaches used in the rich world.”
For investors looking to capitalize on these strangely resilient markets, EMQQ Global has a suite of emerging markets exchange traded funds that provide exposure to the internet and e-commerce sectors within the developing world. These funds include the Emerging Markets Internet & Ecommerce ETF (NYSE Arca: EMQQ), the Next Frontier Internet & Ecommerce ETF (FMQQ), and the India Internet and Ecommerce ETF (NYSE Arca: INQQ).
By focusing on the internet and e-commerce in emerging markets, EMQQ looks to capture the growth and innovation happening in some of the largest and fastest-growing populations in the world. More than 60% of EMQQ’s assets are weighted toward China.
FMQQ, meanwhile, seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Next Frontier Internet and Ecommerce Index (FMQQetf.com). While it has the same investment philosophy as EMQQ, FMQQ has no China-based holdings. Securities must meet a minimum of a $300 million market cap and pass a liquidity screen that requires a $1 million average daily turnover.
Launched in April, INQQ intends to capitalize on India’s rapidly growing digital and e-commerce sectors. INQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the India Internet and Ecommerce Index.
For more news, information, and strategy, visit the Emerging Markets Channel.