Kevin Carter, Founder of EMQQ – The Emerging Market Internet & Ecommerce UCITS ETF, says Coronavirus has turbo-charged the use of E-commerce in emerging markets, and this sector will become a much bigger factor in terms of fuelling growth in these countries.Kevin Carter, CEO of EMQQ ETF, says: “As the virus continues to spread, more data is confirming the massive transition global consumers are making towards increasingly digitised and mobile lifestyles. Countries that were slow to adopt or had lower penetration rates of ecommerce such as Brazil and India, are now seeing an acceleration in this space. The pandemic may have accelerated Ecommerce adoption in emerging markets by as much as six years[5].”
The Emerging Market Internet and Ecommerce ETF, which is distributed on the HANetf white label platform, delivers exposure to an index of leading companies driving the growth of online consumption in the developing world. To be included, companies must derive more than half their profits from Ecommerce or internet activities, including search engines, online retailers, social networks, online video, online gaming, e-payment systems and online travel. Unlike most emerging market indices the companies included do not need to be listed locally.
The ETF successfully executed its semimanual rebalance at the end of June with the addition of nine companies and three reductions and a new total of 83 holdings. The rebalance resulted in no major changes to the top ten holdings, however one notable addition with a weighting of over 2 per cent was Alibaba Health Information Technology Ltd. It provides a medical services network, pharmaceutical e-commerce and operates cloud hospital platforms to connect doctors, patients, pharmacies, and third-party medical service providers.
Carter says: “We see how the healthcare industries remain under tremendous pressure and in a state of rapid transformation. This will continue to play a larger role in the digitising consumer going forward as other major platforms like Tencent role out their own e-health businesses. We anticipate not only e-health but e-learning and social commerce to be key growth drivers in other geographies as well going forward. The emerging market tech ETF expert went on to say:
“The huge growth in Ecommerce in developing markets, combined with impressive GDP growth predictions for emerging economies compared to advanced ones, and China’s projected retail ecommerce market growth of 16 per cent year-on-year, means you will be hard pressed to find a better place for growth, which we believe is still in its infancy.”
The EMQQ Emerging Markets Internet & Ecommerce index was created by Kevin Carter, CEO of Big Tree Capital and includes luminaries such as Burton Malkiel, Princeton Professor of Economics on its advisory board. The strategy has been one of the best-performing emerging market funds in the world over 2020.
The EMQQ UCITS ETF delivered 16.63 per cent in June 2020, 32.68 per cent YTD and 47.27 per cent in one year.
EMQQ is listed on London Stock Exchange, Borsa Italiana, XETRA and SIX and has a TER of 86bps.
