- The latest rebalance of the EMQQ index has seen our Emerging Markets ETF increase its constituents to 135 stocks [1]
- 90% of the new additions were non-Chinese stocks, with Indian companies accounting for 10 of the 19 additions [2]
- The largest new addition was Kanzhun, a leading online recruitment platform in China
July 2022, London
Our Emerging Markets ETF has added 19 new holdings, bringing its total number of constituents to 135, following a rebalance of its index. The ETF was launched in partnership with HANetf, Europe’s first full services ‘white label’ UCITS ETF issuer in 2018. [3]
While the largest addition was a Chinese internet firm, most of the new additions came from outside China, showing the growth of the e-commerce and tech platform theme across emerging markets. [4]
To be included in the index, more than half of a company’s profits must come from e-commerce or internet activities, but it is not necessary for them to be locally listed.
The three largest companies added during the rebalancing were Kanzhun Ltd (China), Bank Jago Tbk (Indonesia), and PB Fintech (India).
Kanzhun is the largest new addition to EMQQ and is now its 23rd largest holding. Founded in 2014, Kanzhun is the leading online recruitment platform in China. It connects job seekers and enterprises through a mobile app. The company maintains over 100 million users. [5]
Bank Jago Tbk is a leading digital bank based in Indonesia. The company offers savings accounts, loans, and money transfer through digital and mobile channels.[6] In 2020, another EMQQ holding, the GoTo Group, became a major shareholder in the company to help facilitate its digital transformation. GoTo is a leading tech company in Indonesia that offers everything from e-commerce and fintech to ride hailing. [7]
PB Fintech (“PolicyBazaar”) is India’s largest online platform for insurance and lending products. Founded in 2008 the online financial services platform has become a popular app for comparing policies and connecting users to third-party insurance and lending offerings. [8]
On a country level, India continues to grow in prominence in EMQQ, with 10 of the 19 new additions coming from companies originating there. Alongside PB Fintech, mentioned above, Indian Energy Exchange, an online energy brokerage and Truecaller AB, an online Caller ID app with over 300 million user, [9] were added.
In total, EMQQ added 19 companies in the June rebalance:
Kanzhun Ltd, Bank Jago Tbk, PB Fintech Ltd, India Energy Exchange Ltd, Brightcom Group, Tanla Platforms Ltd, Truecaller AB, Pet Center Comercio, Dingdong Cayman, Angel One Ltd, Intelligent Design Arena Ltd, ICICI Securities Ltd, Happiest Minds Ltd, Gamania Digital Entertainment, Teamlease Services Ltd, Gravity Co Ltd, Motilal Oswal Financial Services, Yidu Tech Inc, and Swvl Holdings Corp.
The rebalance also saw 14 companies removed from the EMQQ index due to market capitalisation, liquidity, and trading volume. These included: Cafe24 Corp, Infracommerce Cxaas SA, Fire Rock Holdings Ltd, TCS Group Holdings Ltd, Quidan Inc, VK Co Ltd, Headhunter Group PLC, Uxin Ltd, Kginics Co, Yandex NV, Cartrade Tech Ltd, So-Young International, Ozon Holdings Plc, and Qiwi PLC.
EMQQ also has a sister ETF, FMQQ Next Frontier Internet & Ecommerce ESG-S UCITS ETF (FMQQ). FMQQ is designed to provide investors with exposure to the Internet and Ecommerce sectors of the developing world except for China.
Kevin Carter, manager of Emerging Markets ETF, commented: “India was again the main highlight from this last rebalance. Over half the new additions originated there. We believe this trend will continue as time evolves. The Indian internet opportunity in many ways mirrors China 10 years ago and the US over two decades ago. We often refer to EM countries like India and others outside China as being part of a ‘digital third wave.’ These markets are just reaching critical mass in terms of internet users and smartphone penetration, which will provide strong tailwinds for their growth over the next decade.”
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