Forget China; How to Get Exposure to the Fastest-Growing Asian Emerging Markets

The BRICs — Brazil, Russia, India, and China — were coined 20 years ago and have been the prevailing engines of emerging markets growth over the past few decades, but as these economies mature, the phenomenal growth witnessed yesteryear is starting to slow down. Nevertheless, a new group of developing countries in Asia could take their place — the Asian Growth Cubs.

In the upcoming webcast, Forget China; How to Get Exposure to the Fastest-Growing Asian Emerging Markets, Maurits Pot, founder and CIO of Dawn Global Management, will discuss this unparalleled investment opportunity in Southeast Asia, and highlight a new emerging markets strategy that is the only Southeast Asia-focused ETF and the first active thematic EM ETF in the world.

Specifically, the recently launched Asian Growth Cubs ETF (CUBS) is the first active thematic ETF to focus on public equities in emerging and frontier growth markets.

CUBS offers investors actively managed exposure to five large, fast-growing markets — Bangladesh, Indonesia, Pakistan, the Philippines, and Vietnam. These five economies have individually grown GDP faster than 6% a year in USD since 2000. In addition, Bangladesh and Vietnam have compounded GDP for 40 consecutive years, including 2020. Yet, these markets remain inaccessible to most foreign investors due to little or no ETF coverage or American Deposit Receipt listings.

“The Asian Growth CUBS ETF is an active, thematic ETF focused on five large, fast-growing yet historically difficult-to-access equity markets located in Asia spanning over 860m people: Bangladesh, Indonesia, Pakistan, Philippines, and Vietnam,” according to Dawn Global.

“The IMF expects Emerging Asia to be the fastest-growing region in the world between 2020-26, driven by young, educated, digitally enabled, and growing middle-class populations.”

Dawn Global believes that active investment management is required to identify the most compelling growth companies in these less covered markets and mitigate company and governance risk. The investment process involves top-down company screening and bottom-up company analysis to identify the most compelling investment opportunities. The ETF’s high-conviction portfolio is reviewed quarterly and re-balanced twice a year through equal weighting across all securities to mitigate single country and single company risk. The portfolio is geared towards tomorrow’s economy, with a bias towards healthcare, telecom media technology, consumer goods, and financials.

Additionally, the fund provider takes an environmental, social, and governance investment approach when selecting component holdings.

Financial advisors who are interested in learning more about emerging markets in Southeast Asia can register for the Tuesday, January 18 webcast here.