For example, India’s population is 25 times larger than South Korea and 54 times larger than Taiwan, but India only makes up 6% of the MSCI EM Index, whereas South Korea is 16% and Taiwan is about 12%. In the frontier market space, Kuwait makes up a hefty 26% of the MSCI Frontier Market Index, but the Middle East country’s population is 51 times smaller than Nigeria and 27 times smaller than Vietnam.
“Emerging Market allocations are evolving as investors refine their exposure in an effort to capture the growth of emerging and frontier markets,” Carter said.
Carter also argued that the shift in the way we live will also affect emerging market opportunities. For instance, emerging market countries are witnessing growth of affordable access to broadband, with smartphones usage overtaking both mobile phone and personal computers. The ease of access to the internet through mobile devices has also fueled consumer habits, notably increased usage of online retail shopping or e-commerce.
As investors look for ways to access the growing emerging market segment, one can consider targeted plays like the Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ) to help gain targeted exposure to the quickly expanding global consumer sector, notably those related to online retailers or the quickly expanding e-commerce industry in the developing world. To be included within the ETF’s underlying index, companies must derive their profits from Ecommerce or Internet activities and include search engines, online retail, social networking, online video, e-payments, online gaming and online travel.
EMQQ primarily focuses on the internet and e-commerce sectors of the developing world, helping investors capitalize on consumption in emerging markets, which represents a significant opportunity as more than a billion people are expected to enter the consumer class in the coming decades.
Financial advisors who are interested in learning more about the emerging markets can watch the webcast here on demand.