With the coronavirus outbreak in full swing around the globe, a dependence on eCommerce is rising, which should not be relegated as a one-time event when the virus wanes, but a pervading trend that should continue. Data from Juniper Research shows that eCommerce will grow exponentially over the next four years.
“A new report from Juniper Research suggests that total eCommerce transactions will reach $4.8 trillion by 2024, up from $3.3 trillion in 2020,” an Internet Retailing report noted. “This growth will be driven by emerging markets, with China having 62% value growth over the next 4 years. The research identified the Chinese market as a major factor, as well as regions such as Latin America and Africa and the Middle East, which are likely to see huge improvements in connectivity.”
This data should give funds like the Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ) a chance to capitalize on profitable opportunities in eCommerce. EMQQ tracks an index of leading Internet and eCommerce companies serving Emerging Markets. It seeks to offer investors exposure to the growth of online consumption in the developing world. EMQQ holdings operate in diverse markets such as India, China, Brazil, Turkey, Nigeria, and Indonesia, to name a few. To be included, the 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.
“We’re all living in an eCommerce world now, whether we want to or not, and so far, the eCommerce infrastructure has held up remarkably well, ” said EMQQ Emerging Markets Internet & ECommerce ETF founder Kevin Carter, who also noted that big-name eCommerce companies in China have responded during the Covid-19 outbreak.
Broad EM ETF Exposure
Investors who want broad exposure to EM can look at funds like the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO). VWO employs an indexing investment approach designed to track the performance of the FTSE Emerging Markets All Cap China A Inclusion Index. It invests by sampling the index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the index in terms of key characteristics.
Another fund to consider is the aforementioned iShares MSCI Emerging Markets ETF (NYSEArca: EEM). EEM seeks to track the investment results of the MSCI Emerging Markets Index. The fund generally invests at least 90% of its assets in the securities of its underlying index and in depositary receipts representing securities in its underlying index. The index is designed to measure equity market performance in the global emerging markets. The underlying index will include large- and mid-capitalization companies and may change over time.
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