With many emerging markets stocks mired in now-lengthy funks, investors are often encouraged to take a long-term view of the asset class, but they can’t be blamed for frustration regarding that now-prosaic advice.
However, it’s likely to take some time for emerging markets equities to return to their glory days. With that in mind, it’s pivotal that investors identify the right strategies with compelling long-term potential. Enter the Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ).
EMQQ is heavily allocated to consumer internet stocks and other companies with ties to the emerging markets consumer theme. On that note, it stands to reason that the exchange traded fund could be powered by stronger labor participation in developing economies — a longer-ranging theme to be sure. To be specific, greater female participation in emerging markets labor forces could be a long-term boost for EMQQ.
“Rising rates of labor participation among women could spur a drastic change in potential real gross domestic product growth in emerging markets and globally, according to Ned Davis Research, a global independent investment research firm,” reports Jessica Hamlin for Institutional Investor.
EMQQ provides exposure to stocks from countries, many of which are behind Western economies in terms of women in the workforce. While there’s clearly work to be done on that front, the good news is that as that progress is made, it could be a credible investment catalyst. That’s particularly true for many of the names residing in EMQQ.
“Grindal and Ayers compiled a list from NDR’s all-country world index and selected the economies with female participation rates under 60 percent, a rate observed in economies with the largest and most gender-diverse workforces. The list included countries such as Egypt, India, Pakistan, Saudi Arabia, Turkey, Singapore, Ireland, Finland, Austria, Greece, France, the U.S., and Chile, among others,” according to Institutional Investor.
India, Singapore, Egypt, and Turkey combine for over 15% of EMQQ’s geographic exposure. More labor force participation among developing economies would boost overall participation, reduce joblessness, and likely lead to increased consumer spending — a potential positive for EMQQ.
An increase in women in emerging markets workforces is likely to enhance productivity as well while potentially creating more demand for the products and services offered by EMQQ member firms.
For more news, information, and strategy, visit our Emerging Markets Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.