The impact of the coronavirus crisis is evident with emerging market assets. Just look at the MSCI Emerging Markets Index, which is lower by 21.28% year-to-date. However, there are some pockets of strength in this asset class.
Consider the Emerging Market Internet & Ecommerce ETF (NYSEArca: EMQQ), which like its US-focused counterpart, is benefiting from shifting retail spending and stay at home trends.
EMQQ, the first ETF to focus on the universe of internet and eCommerce innovators in some of the fastest-growing markets in the world, provides investors with exposure to the internet and eCommerce sectors of the developing world. Many investors believe that the growth of consumption in emerging markets represents a significant growth opportunity as more than one billion people are expected to enter the consumer class in the coming decades. Increasingly, these consumers are using smartphones and broadband mobile connections to access the internet.
EMQQ As An Emerging Server
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.
Some recent data points have shown signs of softness in the world’s second-largest economy, but Beijing is also taking steps to prop up consumption and the local economy. China has been looking to increase internal consumption to reduce the economy’s sensitivity to exports, and those efforts appear to be paying dividends. While some data points indicate the Chinese economy and consumer spending are slowing, policymakers remain proactive.
“EMQQ has a live track record stretching back more than 5 years and even in the midst of 2020s outlandish volatility has remained a top performer among all EM funds,” according to the issuer. “The fund is currently in the top 1% YTD among all EM equity funds, down -1.05% YTD as globally, internet & eCommerce businesses are getting a big boost, and the fund is seeing strong numbers as China stabilizes and continues its recovery.”
EMQQ primarily focuses on the internet and e-commerce sectors of the developing world, helping investors capitalize on the growth of consumption in emerging markets, which represents a significant growth opportunity as more than a billion people are expected to enter the consumer class in the coming decades.
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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.