- The Emerging Markets and Ecommerce UCITS ETF (EMQQ) continues to
solidify its hold on the #1 spot for all EM ETF’s for YTD and 1yr performance
according to ETFdb.com as of Aug 1, 2020. [1]
- Despite over 40% gains YTD, we see the macro secular trends that EMQQ
captures as still being in its infancy. Over one billion people in the
developing world are yet to obtain a smartphone indicating, just how
early we are in this growth cycle.
- We are now seeing ecommerce in the less developed markets begin to
finally catch up to demand as initial supply chain disruptions and logistics problems
are being solved. (ie: India’s food delivery platforms and Africa’s ecommerce
leader Jumia)
- U.S.
China relations enter a new phase as Secretary of State Mike Pompeo’s July 23rd
speech aimed at escalating the conflict from a trade/economic focus to an
ideological one, going so far as to dust off an old Reagan cold war mantra,
“trust but verify” and replacing with his own “distrust and verify”. [2]
- It is
clear now the administration views this adversarial strategy as advantageous
heading into November’s election and will continue in this posturing towards
the likes of Huawei, TikTok and others using the national-security threat
label.
- EMQQ companies best positioned in these emerging geographies are now starting
to be recognized by local governments and investors as the cornerstones to
their future economies, reflected in new protectionist policies and now market
appreciation.
The Emerging Markets and Ecommerce UCITS ETF (EMQQ) has posted a return of over 60% for the trailing
year, managing to further consolidate its lead as the best performing EM ETF in
the category.
Leading the contribution
to performance YTD has been the rapidly growing Chinese ecommerce platform Pindoudou
(PDD) posting a return of over 140% as its targeting of lower tier cities and
an increasingly price sensitive consumer has proved beneficial. Two other
notable contributors were Singapore based Sea ltd (SE) and Argentina based
MercadoLibre posting YTD returns of 204% and 97% respectively. Both companies
are prime examples of how these digitised business models are borderless and
represent an opportunity far beyond what a weighting on a fact sheet indicates.
EMQQ Emerging Markets Internet & Ecommerce UCITS ETF Performance
July* |
YTD** |
12 Month*** |
9.08% |
44.72% |
59.93% |
Past performance is no guarantee of future performance
Source: Bloomberg, HANetf *July figures based on 01.07.20 - 31.07.20 **YTD figures based on 01.01.20 - 31.07.2020 ***12 Month figures based on 30.06.19 - 31.07.20
Sea Ltd, who operates a
gaming, entertainment and ecommerce platform, has broadened its offerings to
reach most of Southeast Asia including Indonesia, Vietnam, Thailand, and
Philippines.[3] MercadoLibre similarly has become the ecommerce leader
in most of central and South America covering over 18 countries including
Argentina, Brazil, Chile, Mexico, Peru and Panama.
On an absolute basis,
EMQQ’s best performer was a recent addition from the June rebalance in GSX Tech
Edu (GSX) who posted YTD returns in excess of 305%. The China-based online
education platform is a pure play into the rapid adoption and utilization in
the country to promote online and at home education options while navigating
the pandemic. The online education segment has proven one of the stronger
subsectors within EMQQ this year as well as the fintech and payment platform segments.
Both strong secular trends we anticipate continuing over the long run.
As the consumer flight
to digitize continues globally, we are now seeing geographies with moderate
conversion rates to online consumption now accelerating their adoption. The
catch up in this new consumer behaviour is now becoming a permanent fixture
with most consumers planning to continue the mobile behaviour even after brick
and mortar reopen, signalling a permanent shift that ultimately is beneficial
to EMQQ. [4]
EMQQ vs Key EM Competitors- as of 31/08/2020
(For illustrative purposes only)

Source: Bloomberg, July 31, 2020
Past performance is not an
indicator for future results and should not be the sole factor of consideration
when selecting a product. Investors should read the prospectus of the Issuer
(“Prospectus”) before investing and should refer to the section of the
Prospectus entitled ‘Risk Factors’ for further details of risks associated with
an investment in this product.
Industry News
Ant Group IPO: Anticipated to be one of the largest IPO’s in history, Alibaba’s
fintech arm Ant Financial is looking to forgo the trend of recent years of
listing in the U.S. and instead targeting a HK and Shanghai listing. [5]
DiDi IPO: One of the largest private companies in the world, the ride hailing
unicorn from China is rumoured to be getting pressure from investors like
SoftBank and Hillhouse to go public. A target of October or November could be
the window and most likely listing in HK due to the recent China/US tensions. [6]
India Increasing Domestic Technology
Protection:
Following a fatal military
skirmish on the northern border with China, India’s Modi has moved to retaliate
in blocking a number of Chinese made apps within the country. The move has
proven a strategic one as Modi’s government has taken stronger action to
protect domestic tech companies as well as a political push back on the
Chinese. [7]
As the developing world
continues its digital transformation, the spread of access and cost-effective
connectivity is empowering a new generation of entrepreneurs that don’t need to
move to Silicon Valley to be successful. It can now be found anywhere from
Bengaluru India, Nanjing China, Mexico City Mexico, Buenos Aires Argentina and Lagos
Nigeria, with the story getting a whole lot bigger when the rest of the world comes
online.
"The entrepreneurial effect multiplies
itself in each one of the 18 countries where we are present and it becomes real
in the half a million Latin American families who live from selling in Mercado
Libre.”
Marcus Galperin – CEO of MercadoLibre [8]

For illustrative purposes only
Source: eMarketer May 2020
Top 10 Constituents |
Weight % |
Tencent Holdings Ltd
|
7.66% |
Alibaba Group Holding Ltd
|
7.60% |
Meituan Dianping |
6.68% |
Naspers Ltd |
6.42% |
MercadoLibre Inc |
6.22% |
Pinduoduo Inc |
5.93% |
NAVER Corp |
4.86% |
Prosus NV |
4.58% |
NetEase Inc |
4.23% |
JD.com Inc |
4.15% |
Source: Bloomberg/ HANetf. Data as of 31/07/2020
Regional Breakdown |
Weight |
Asia |
77.29% |
South America |
9.61% |
Africa |
6.82% |
Europe |
6.28% |
Source: Bloomberg/ HANetf. Data as of 31/07/2020
Fund Details
EMQQ Emerging Markets and Ecommerce UCITS ETF, is a UCITS compliant Exchange Traded Fund domiciled in Ireland.
The fund tracks an index of leading internet and Ecommerce companies that serve emerging markets, including search
engines, online retailers, social networks, online video, online gaming, e-payment systems and online travel. The fund seeks
to provide exposure to the growth of online consumption in the developing world.
Please remember that the value of your investment may go down as well as up and past performance is no indication of
future performance.
EXCHANGE |
BB CODE |
RIC |
ISIN |
CURRENCY |
INCOME |
London Stock Exchange |
EMQQ LN
|
EMQQ.L
|
IE00BFYN8Y92
|
USD
|
Acc
|
London Stock Exchange
|
EMQP LN
|
EMQP.L
|
IE00BFYN8Y92
|
GBP
|
Acc
|
Borsa Italiana
|
EMQQ IM
|
EMQQ.MI
|
IE00BFYN8Y92
|
EUR
|
Acc
|
XETRA
|
EMQQ GY
|
EMQ1.DE
|
DE000A2N5XA8
|
EUR
|
Acc
|
SIX
|
EMQQ SW
|
EMQQ.S
|
IE00BFYN8Y92
|
CHF
|
Acc
|
Click here to download. Monthly Emerging Markets, Internet and Ecommerce Report.