Kevin Carter, Founder & CIO, EMQQ The Emerging Markets Internet & Ecommerce ETF discusses how the new consumer wave, driven by demand for ecommerce and a digitized lifestyle, will transform developing economies.
“The best way to think about EMQQ is a confluence of three different themes, three megatrends happening in the world at the same time, creating the fastest growing sector in the world, perhaps not just today, but ever,” says Carter.
The first theme is the growth of the emerging consumer. More than one billion people are expected to enter the consumer class in the coming decades, and global demand in the ecommerce space continues to transcend typical consumption patterns. The second megatrend is the increasing affordability of smartphones, and the third is increasing access to the internet. This massive expansion of consumers has the ability to catalyze an entire digital consumer revolution. The confluence of these three trends results in massive revenue growth and accompanying value creation. The EMQQ Index has seen an average annual growth rate of 37%.
“This is not only the fastest growing sector in the world today, but in fact the fastest growing sector ever, in terms of public companies and their revenue.” Seeing the profitability and opportunity for growth in the sector, Carter created the EMQQ index as a long-term emerging market investment. Slowed recovery from the COVID-19 pandemic was a considerable risk faced by EMQQ, but growth rates have continued to be strong through the economic slowdown and recovery.
Carter predicts that this year’s growth rate is projected to be about 30%, and he predicts that the sector will grow faster than any other sector in the world for the next five years.
EMQQ includes 96 publicly-traded emerging markets internet and ecommerce companies and uses a rules-based index. EMQQ ETF provides investors with exposure both to growth in Internet and Ecommerce in the developing world and to private companies and frontier markets.
Top holdings include Meituan, Pinduoduo INC, and Alibaba Group Holding-SP ADR. The companies that EMQQ ETF tracks include online retail, search engines, social networking, online video, e-payments, online gaming, and online travel. EMQQ not only has outperformed most of the Growth ETFs in developed markets, but it’s also the number one Emerging Market Equity ETF over the past 1-year, 3-year, and 5-year periods ending March 31, 2021, based on total returns.
To learn more on this topic, catch a replay of EMQQ’s webcast: Emerging Markets 3.0. Topics include:
- What McKinsey & Co. calls “the biggest growth opportunity in the history of capitalism”
- How to capture the growth of billions of new consumers in Emerging Markets
- China: The Ant Group IPO failure and the government and regulatory risks for Alibaba and Tencent
- India: Who will be the “AMZN of India?” The India opportunity and the pipeline of Indian internet IPOs