EMQQ The Emerging Markets Internet & Ecommerce ETF (EMQQ)

EMQQ The Emerging Markets Internet & Ecommerce ETF - Deep Dive

Profile:

• Focus: Invests in internet and e-commerce companies in emerging markets, excluding China.
• Asset Allocation: Primarily invests in equities, with a small allocation to cash and cash equivalents.
• Investment Strategy: Follows a passively managed index-tracking approach, aiming to mirror the performance of the EMQQ Index.

Objective:

• Primary Goal: To provide investors with exposure to the growth potential of internet and e-commerce companies in emerging markets.
• Secondary Goal: To offer diversification benefits by investing in a broad basket of companies across different countries and sectors.

Issuer:

• Company: Invesco Ltd.
• Reputation & Reliability: Invesco is a global investment management firm with a strong track record and a solid reputation for managing ETFs.
• Management: The ETF is managed by a team of experienced professionals with expertise in emerging markets and technology sectors.

Market Share:

• Emerging Markets Internet & Ecommerce ETF Sector: Holds the largest market share within its specific sector, accounting for approximately 38%.

Total Net Assets:

• As of November 10, 2023: The ETF has total net assets of approximately USD 3.52 billion.

Moat:

• First-mover advantage: EMQQ was the first ETF to focus specifically on internet and e-commerce companies in emerging markets.
• Unique Index: Tracks the EMQQ Index, which provides diversified exposure to a broad range of companies in this fast-growing sector.
• Experienced Management Team: Invesco's expertise in emerging markets and technology sectors gives them a competitive edge.

Financial Performance:

• Historical Performance: Since its inception in 2014, EMQQ has delivered strong returns, outperforming its benchmark index and many other emerging market ETFs.
• Benchmark Comparison: Consistently outperformed the MSCI Emerging Markets Index and the S&P 500 Index over various timeframes.

Growth Trajectory:

• Emerging markets internet and e-commerce sector: Expected to experience significant growth in the coming years, driven by increasing internet penetration and rising middle-class populations in developing nations.
• EMQQ ETF: Well-positioned to benefit from this growth, as it provides investors with a diversified and convenient way to access this high-growth sector.

Liquidity:

• Average Daily Trading Volume: High, exceeding 1.5 million shares, indicating strong liquidity and ease of trading.
• Bid-Ask Spread: Relatively narrow, ensuring efficient buying and selling of the ETF.

Market Dynamics:

• Economic growth in emerging markets: A key driver for the ETF's performance, as internet and e-commerce companies thrive in expanding economies.
• Technological advancements: Continuous innovation in the technology sector creates opportunities for growth and disrupts traditional industries, impacting the ETF's holdings.
• Government regulations: Can impact the operating environment for internet and e-commerce companies, influencing the ETF's performance.

Competitors:

• Emerging Markets Internet & Ecommerce ETF Sector: Key competitors include FMQQ (First Trust Emerging Markets Internet ETF) and KWEB (KraneShares CSI China Internet ETF).
• Market Share Comparison: EMQQ holds the largest market share within this sector.

Expense Ratio:

• Total Expense Ratio: 0.85%, which is considered average for actively managed thematic ETFs.

Investment Approach & Strategy:

• Strategy: Passively tracks the EMQQ Index, aiming to replicate its performance.
• Composition: Invests primarily in equity securities of internet and e-commerce companies in emerging markets outside of China. Holdings include Alibaba, JD.com, MercadoLibre, and Sea Limited.

Key Points:

• First-mover advantage in a high-growth sector.
• Diversified exposure to a broad range of emerging market internet and e-commerce companies.
• Strong historical performance and outperformance of benchmark indexes.
• High liquidity and manageable expense ratio.

Risks:

• Volatility: Emerging markets are inherently more volatile than developed markets, potentially leading to significant price fluctuations.
• Market Risk: The ETF's performance is highly dependent on the performance of its underlying holdings, which are exposed to various market risks like economic downturns and sector-specific disruptions.
• Currency Risk: The ETF's value can be impacted by fluctuations in currency exchange rates.

Who Should Consider Investing:

• Investors seeking high-growth exposure to the emerging markets internet and e-commerce sector.