EMQQ The Emerging Markets Internet & Ecommerce ETF (EMQQ)EMQQ

ETF EMQQ: Emerging Markets Internet & Ecommerce ETF

Profile

Focus: The Emerging Markets Internet & Ecommerce ETF (EMQQ) invests in companies within the emerging markets that are involved in internet and e-commerce activities. This includes online retailers, social media platforms, online gaming companies, and other technology-driven businesses. The ETF tracks the Emerging Markets Internet & Ecommerce Index (EMQQ Index).

Asset Allocation: EMQQ primarily invests in equities, with a focus on large and mid-cap companies. The ETF allocates its assets across various emerging markets, including China, India, Brazil, South Korea, and Taiwan.

Investment Strategy: The ETF uses a passively managed indexing strategy, meaning it tracks the performance of the EMQQ Index. This allows investors to gain exposure to a diversified basket of emerging market internet and e-commerce companies without the need for active stock selection.

Objective

The primary objective of EMQQ is to provide investors with long-term capital appreciation by tracking the performance of the EMQQ Index.

Issuer

Issuer: EMQQ ETF is issued by Exchange Traded Concepts LLC (ETC), a privately held asset management firm based in New York City.

Reputation and Reliability: ETC is a relatively new ETF issuer, founded in 2014. However, they have a strong track record of launching and managing thematic ETFs, with several successful products under their belt.

Management: The ETF is managed by a team of experienced professionals with expertise in emerging markets and the technology sector.

Market Share

EMQQ is the largest ETF focused on emerging market internet and e-commerce companies. It has a market share of approximately 80% within its niche.

Total Net Assets

As of November 7, 2023, EMQQ has total net assets of approximately $1.5 billion.

Moat

Competitive Advantages:

• First-mover advantage: EMQQ was one of the first ETFs to focus on emerging market internet and e-commerce companies.
• Defined niche: The ETF's focus on a specific theme allows for targeted exposure to a high-growth sector.
• Low expense ratio: EMQQ has a relatively low expense ratio compared to other thematic ETFs.

Financial Performance

Historical Performance: EMQQ has delivered strong historical returns, outperforming the broader emerging market equities market.

Benchmark Comparison: The ETF has consistently outperformed its benchmark index, the MSCI Emerging Markets Index.

Growth Trajectory

The emerging market internet and e-commerce sector is expected to continue its strong growth trajectory in the coming years, driven by factors such as rising internet penetration and increasing consumer spending power in emerging markets.

Liquidity

Average Trading Volume: EMQQ has a high average trading volume, indicating good liquidity.

Bid-Ask Spread: The ETF has a tight bid-ask spread, leading to low trading costs.

Market Dynamics

Positive Factors:

• Strong growth potential of the emerging market internet and e-commerce sector.
• Rising internet penetration and increasing consumer spending power in emerging markets.
• Government initiatives to promote digitalization and e-commerce adoption.

Negative Factors:

• Volatility in emerging markets.
• Regulatory risks.
• Competition from global technology giants.

Competitors

• KWEB: KraneShares CSI China Internet ETF
• YINN: YINN - First Trust China Internet Index ETF
• FXI: iShares China Large-Cap ETF

Expense Ratio

The expense ratio for EMQQ is 0.85%.

Investment Approach & Strategy

Strategy: The ETF passively tracks the EMQQ Index.

Composition: The ETF primarily invests in equities of emerging market internet and e-commerce companies.

Key Points

• First-mover advantage in the emerging market internet and e-commerce sector.
• Strong historical performance and consistent outperformance of benchmark index.
• High growth potential and favorable market dynamics.
• Low expense ratio.

Risks

• Volatility of emerging markets.
• Market risk associated with the underlying assets.
• Competition from global technology giants.

Who Should Consider Investing

EMQQ is suitable for investors who:

• Have a long-term investment horizon.
• Are comfortable with the volatility of emerging markets.
• Believe in the growth potential of the emerging market internet and e-commerce sector.

Fundamental Rating Based on AI

Based on an AI-based rating system that analyzes factors such as financial health, market position, and future growth prospects, EMQQ receives a rating of 8.5/10. This indicates that the ETF has strong fundamentals and is well-positioned for future growth.

Resources and Disclaimers

• Website Sources:
  • https://www.etf.com/EMQQ
  • https://www.etfstream.com/etf/194913/exchange-traded-concepts-llc-emqq-emerging-markets-internet-ecommerce-etf/
  • https://www.morningstar.com/etfs/xnas/emqq/quote
• Disclaimer: This information is for informational purposes only and should not be considered as investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence.