2 ETFs to Consider as Vietnam's Digital Economy Expands in Q1

The role of the internet has been vital to the global economy, especially during the pandemic. With an increased reliance on this digital economy, it should infuse life into emerging market (EM) economies such as Vietnam.

“According to the ministry, the digital economy is made up of the information communication technology (ICT) digital economy, the Internet digital economy, and the digital economy of industries,” an OpenGovAsia report noted. “In the first quarter of this year, the Internet digital economy’s growth rate was 28%, reaching US$8 billion in revenues.”

“The ICT digital economy and digital economy of industries each had average revenue growth rates of about 15%,” the report added. “By the end of February, the number of newly-established digital technology enterprises reached 65,329, an increase of 487 enterprises compared to 2021.”

As the digital economy continues to propel growth for Vietnam, exchange-traded fund (ETF) investors can look at the Global X MSCI Vietnam ETF (VNAM) as a potential opportunity. VNAM seeks to provide investment results that generally correspond to the MSCI Vietnam IMI Select 25/50 Index, which is designed to represent the performance of the broad Vietnam equity universe while including a minimum number of constituents, as defined by MSCI, Inc.

Effect of E-Commerce on EM

For a more broad play on the increasing role of the digital economy in emerging markets, investors can look at the Global X Emerging Markets Internet & E-Commerce ETF (EWEB). EWEB seeks to invest in companies positioned to benefit from the increased adoption of internet and e-commerce technologies in emerging markets.

EWEB offers investors:

  • High growth potential: By 2025, a forecasted 70% of the global population will have a mobile internet subscription, with new subscribers mostly coming from emerging markets.
  • New consumer preferences: The pandemic has forced many businesses to offer goods and services online for the first time, shifting consumer expectations and expanding the domain of internet and e-commerce companies.
  • Structural tailwinds: Innovative internet and e-commerce companies are sprouting up worldwide. EWEB looks beyond Silicon Valley and other household names, targeting those positioned to capitalize on untapped growth in emerging markets.

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