The developing economies are witnessing a rising group of middle-income consumers who have become increasingly reliant on digital devices to stay connected. With a global pandemic forcing a more digitized lifestyle, we have witnessed an increased adoption of e-commerce or online shopping to meet everyday needs.
In the upcoming webcast, the Future of Emerging Markets and An Accelerating Digital Revolution, Kevin Carter, Founder and CEO, EMQQ, will explore the impacts of a growing digital consumer class in the emerging markets and companies best positioned to benefit from this shift in consumer behavior.
For example, ETF investors can gain targeted exposure to the consumer spending potential of a rising middle class in the expanding emerging markets through the Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ). EMQQ focuses on the growing emerging market consumer sector, notably those related to online retailers or the quickly expanding e-commerce industry.
“The performance of the Emerging Markets Internet and Ecommerce space in 2020 has been a bright spot not just in EM investing but in looking across global markets as well, and has been achieved despite the ongoing COVID-19 pandemic, seemingly never-ending trade tensions, and delisting threats in the U.S.,” Carter said in a recent note. “But this has the potential to be much more than a quarter-to-quarter or even year-to-year story. COVID-19 seems to have acted as an accelerator for smartphone Ecommerce in Emerging Markets. This, coupled with what we believe to be strong fundamentals and attractive valuations, could continue to offer further potential for Emerging Markets Internet and Ecommerce companies to see potential growth going forward.”
The Emerging Markets Internet & Ecommerce ETF tries to reflect the performance of the EMQQ Index, which includes companies that must derive the majority of their profits from E-commerce or Internet activities and further includes search engines, online retail, social networking, online video, e-payments, online gaming, and online travel.
“EMQQ avoids the gaps that traditional index methodologies produce by requiring that its constituents derive at least half of their revenue from Ecommerce in emerging or frontier markets. In other words, EMQQ is agnostic when it comes to exchange listing or company domicile; as long as a company generates more than half of its revenue in emerging markets, it is eligible for consideration for inclusion in the index,” according to EMQQ.
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.
The ETF’s portfolio includes many prominent emerging market names, including Meituan Dianping, Tencent, Alibaba, Naspers, MercadoLibre, Prosus, JD.com, PinDuoDuo, Naver, and Netease, among others.
Financial advisors who are interested in learning more about the emerging markets can register for the Wednesday, September 16, webcast here.