While emerging markets are currently facing heavy headwinds, there are many countries in emerging and developing markets that have great potential for long-term investors. Active private investor David Stevenson suggests in the Financial Times that a “rifle shot approach to picking out countries and markets with high potential but perhaps low valuations is… a more sensible approach” for investors stepping back into emerging markets.
Stevenson cites countries like India, Vietnam, and Turkey as such markets worth a closer look. Latin America is also interesting for bullish investors with a long-term horizon.
Citing a statistic from Charlie Robertson, chief economist at emerging markets-focused investment bank Renaissance Capital and author of “The Time-Travelling Economist,” roughly 355 million South Asians will enter the 15-19 age group in the 2020s. Economic theory suggests that countries seeing a demographic surge in the younger generation tend to be long-term economic winners.
Robertson also notes that buying high-growth countries with high multiples may not be a great short-term investment but will most likely pay off over 10 years. According to the economist: “If you can identify the countries that might grow at 7% a year, doubling the economy in a decade, quadrupling it over a generation and growing eight times over 30 years, then investors should do much better than those investing in countries growing at just 2% a year.”
For investors looking to invest in the internet and e-commerce sectors within the developing world, EMQQ Global has a suite of emerging markets exchange traded funds that provide such exposure. These funds include the Emerging Markets Internet & Ecommerce ETF (EMQQ ), the Next Frontier Internet & Ecommerce ETF (FMQQ ), and the India Internet and Ecommerce ETF (INQQ ).
By focusing on the internet and e-commerce in emerging markets, EMQQ looks to capture the growth and innovation happening in some of the largest and fastest-growing populations in the world. More than 60% of EMQQ’s assets are weighted toward China.
FMQQ, meanwhile, seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Next Frontier Internet and Ecommerce Index (FMQQetf.com). While it has the same investment philosophy as EMQQ, FMQQ has no China-based holdings. Securities must meet a minimum of a $300 million market cap and pass a liquidity screen that requires a $1 million average daily turnover.
Launched in April, INQQ intends to capitalize on India’s rapidly growing digital and e-commerce sectors. INQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the India Internet and Ecommerce Index.
For more news, information, and strategy, visit our Emerging Markets Channel.