A range of risks threaten U.S. stocks and bonds in the second half. Concerns over expanding the government deficit, inflationary impacts of tariffs, and more create challenges for U.S. stocks and bonds. For those investors looking instead to potential international growth opportunities, the KraneShares Emerging Markets Consumer Technology Index ETF (KEMQ ) is worth consideration.
The Commerce Department recently issued its final first quarter U.S. GDP estimate, shrinking 0.5%. The contraction marked the first in three years and was lower than the initial -0.3% estimate. Consumer spending retreated dramatically, growing just 0.5% after Q4 2024’s 4% gains.
May’s inflation report reflected a rise in inflation coupled with a decline in consumer spending and income. These economic cracks will likely continue to widen over the summer and into the fall.
Federal Reserve Chair Jerome Powell weighed in on the likely impending impact of tariffs on consumers in a recent hearing, reported Reuters. Powell noted that companies stockpiling inventory ahead of April tariffs have likely dampened inflation impacts up to this point. However, that reality will likely diminish and “we should start to see this over the summer, in the June number and the July number.”
Seek International Growth Opportunity With KEMQ
For many investors, international opportunities look increasingly compelling, given U.S.-specific risks. Those wanting to broaden and diversify their technology exposures should look to the KraneShares Emerging Markets Consumer Technology Index ETF (KEMQ ). The fund invests in emerging market consumer tech companies, harnessing robust demand in China as well as a number of other countries.
KEMQ could prove beneficial to investors with an underweight to China. While capturing opportunity in the country, the strategy diversifies its exposure across EM countries. Beyond China, top countries by weight in the fund include South Korea, Taiwan, and Brazil, as of May 30, 2025.
The fund targets consumer technology within emerging markets by seeking to track the Solactive Emerging Markets Consumer Technology Index. It offers exposure to Google, PayPal, Amazon, and other equivalents within emerging markets.
KEMQ is currently up 34.88% YTD as of July 1, and trades well above its 50- and 200-day Simple Moving Average. For trend followers, funds consistently trading above their SMAs are considered in solid buy territory.
KEMQ focuses on internet retail and e-commerce growth in 26 emerging market countries, including China. The fund’s structure ensures diversification because of its limitation on country inclusion. One country only accounts for 40% of the fund, with a maximum holding weight of 3% at rebalance.
KEMQ has an expense ratio of 0.50% with a fee waiver that expires on August 1, 2025.
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