ETF Investors Should Consider the Growth Story of Emerging Market Consumers

Emerging market consumers are becoming large influential force in the global markets, exhibiting a preference for online shopping via the smartphone and digital devices. Investors can also capitalize on this shifting in consumer trends through a targeted exchange traded fund that taps into the rapidly expanding e-commerce segment.

On the recent webcast (available On Demand for CE Credit), The Greatest Growth Story in the History of Capitalism: E-Commerce in Emerging Markets, Kevin Carter, Founder and CEO of EMQQ, outlined a number of factors that will support the emerging market outlook, including diversification benefits, a rising middle-income base, more favorable demographics and overall growth outlook in the developing economies.

The emerging markets have shown diversification benefits when compared to developed market exposure, with developing market stocks showing a correlation to the S&P 500 that is less than 1.0. The developing economies make up 85% of the global population and 50% of global GDP, so investors should not miss out on this large chunk of the global picture. The favorable demographics, especially with a larger younger generation, will also help support growth ahead. These developing economies are also expanding at a much faster clip than developed countries, which may provide an attractive growth opportunity for investors ahead.

“The growth of the EM consumer is the story,” Carter said.

Looking ahead, the global consuming class is expected to make up 4.2 billion by 2025, with emerging markets contributing to $30 trillion of total world consumption, compared to $12 trillion back in 2010.