Columbia Emerging Markets Consumer ETF (ECON)

ETF Columbia Emerging Markets Consumer ETF (NYSE: ECON)

Profile:

ECON is an actively managed exchange-traded fund (ETF) that invests in equity securities of consumer discretionary and consumer staples companies domiciled in emerging market countries. The fund primarily focuses on companies with a market capitalization of above $1 billion. Its investment strategy involves investing in companies they believe have the potential for long-term growth due to factors such as rising income levels, urbanization, and changing consumer preferences in emerging markets.

Objective:

The primary investment objective of ECON is to achieve capital appreciation over the long term by investing in a diversified portfolio of consumer companies in emerging markets.

Issuer:

ECON is issued and managed by Columbia Threadneedle Investments, a global asset management firm with over $685.1 billion in assets under management (as of June 30, 2023).

Reputation and Reliability: Columbia Threadneedle Investments has a strong reputation and a long track record in the market. The firm has been managing assets since 1844 and has received numerous awards and accolades for its investment performance.

Management: The ECON portfolio is managed by a team of experienced investment professionals with deep expertise in emerging markets and consumer sectors.

Market Share:

ECON currently holds a market share of 0.53% within the emerging markets consumer sector.

Total Net Assets:

As of October 26, 2023, ECON has $473.4 million in total net assets.

Moat:

One of ECON's competitive advantages is its active management approach. The fund's portfolio managers have the flexibility to select individual stocks based on their proprietary research and analysis, potentially allowing them to outperform the market. Additionally, ECON benefits from the strong global research and analyst network of Columbia Threadneedle Investments, which provides them with insights into emerging markets and consumer trends.

Financial Performance:

Historical Performance:

• Year-to-date (October 26, 2023): -14.97%
• 1 Year: -24.80%
• 3 Years: 17.95%
• 5 Years: 2.64%

Benchmark Comparison: ECON has underperformed its benchmark, the MSCI Emerging Markets Consumer Discretionary Index, over the past year but has outperformed it over the past 3 and 5 years.

Growth Trajectory:

The long-term growth prospects for emerging market consumer companies remain positive due to factors such as rising disposable income, increasing urbanization, and changing consumption patterns. However, the near-term outlook may be impacted by factors such as macroeconomic headwinds and geopolitical uncertainties.

Liquidity:

Average Trading Volume: ECON has an average daily trading volume of 456,558 shares.

Bid-Ask Spread: The average bid-ask spread for ECON is 0.04%.

Market Dynamics:

Factors affecting ECON's market environment include:

• Global economic growth: Stronger economic growth in emerging markets tends to benefit consumer companies.
• Inflation: High inflation can erode consumer purchasing power and hurt demand for consumer goods.
• Interest rate policy: Rising interest rates can impact consumer spending and company valuations.
• Consumer confidence: Consumer confidence levels can influence spending patterns and impact company performance.

Competitors:

The main competitors of ECON include:

• iShares MSCI Emerging Markets Consumer Discretionary ETF (EMCD)
• VanEck Vectors Morningstar Emerging Markets Consumer Index ETF (EMCN)
• Invesco DB Emerging Markets Consumer Discretionary ETF (CEMD)

Expense Ratio:

The expense ratio for ECON is 0.65%.

Investment Approach and Strategy:

Strategy: ECON is an actively managed ETF that invests in a diversified portfolio of consumer companies in emerging markets. The fund does not track a specific index.

Composition: ECON's portfolio is primarily composed of stocks of consumer discretionary and consumer staples companies. The top holdings include Alibaba Group Holding Ltd., Tencent Holdings Ltd., and Meituan.

Key Points:

• Actively managed ETF focusing on emerging market consumer companies.
• Potential for long-term capital appreciation.
• Experienced management team with deep expertise in emerging markets and consumer sectors.
• Average trading volume and bid-ask spread provide decent liquidity.

Risks:

• Volatility: Emerging markets are generally considered more volatile than developed markets.
• Market Risk: The value of ECON's holdings can be affected by factors such as economic conditions, interest rates, and company performance.
• Currency Risk: ECON's investments are denominated in emerging market currencies, which can fluctuate in value against the US dollar.

Who Should Consider Investing:

ECON may be suitable for investors who:

• Have a long-term investment horizon.
• Are comfortable with higher volatility.
• Believe in the long-term growth potential of emerging market consumer companies.

Fundamental Rating Based on AI:

Using an AI-based rating system, ECON receives a 7 out of 10 for its fundamentals. This rating is based on factors such as the fund's financial health, market position, and future prospects.

Justification: ECON benefits from a strong management team, decent liquidity, and a compelling investment theme. However, the fund's recent performance has lagged its benchmark, and it faces risks associated with emerging markets. Investors should carefully consider their risk tolerance and investment goals before deciding whether to invest in ECON.

Resources and Disclaimers:

Resources:

• Columbia Threadneedle Investments website: https://www.columbiathreadneedle.com/us/
• ETF Database: https://etfdb.com/etf/ECON/
• Morningstar: https://www.morningstar.com/etfs/xnas/econ/quote.html

Disclaimer: This information is provided for educational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence.