The Need For EMQQ
Here are EMQQ’s index weightings by country, based on holdings posted on EMQQ’s website.
For now, China accounts for two-thirds of the fund’s weighting. But looking ahead, EMQQ is poised to incorporate up-and-coming local e-commerce firms from emerging economies, which could change the current weightings.
Alpha Or Beta
Many investors might turn to EMQQ for momentum in a high-growth sector, but beyond striving for outsized returns, EMQQ can simply complement EEM and VWO, from a purely “beta” perspective.
For broad emerging markets investors, it’s really about owning the whole package, which, unfortunately, EEM and VWO falls short of (at least for now). EMQQ fills those gaps and offers consumer-focused companies that would otherwise dilute the overbearing hand of state-owned enterprises in most broad emerging markets funds.
At the time this article was written, the author held a long position in Alibaba (BABA). Contact Dennis Hudachek at [email protected], or follow him on Twitter @Dennis_Hudachek.