- With less than 48 hours until Ant Groups IPO, authorities stepped in to
postpone the listing siting changing regulations.[1]
- Despite the pause on the Ant listing, the CCP’s meeting last week to
craft the next 5-year plan reemphasized the desire to continue the
liberalization of the financial system and to allow greater foreign access to
its markets.[2]
- The Ant IPO will be a serious test for the Chinese Stock Market and could
potentially expose a massive flaw in the pricing disparity between the Shanghai
and HK exchanges.
- With the pandemic accelerating again in Europe and the US, the stark
divergency in recovery is only growing as China and other Asian economies seem
to be managing both the human and economic impacts far better than most.
- EMQQ, our emerging markets ETF looks to be grow its India exposure as Paytm, Zamoto, Delhivery, FlipKart and
others are all looking to go public
- EMQQ remains the #1 performing EM Index for the category as of the end
of September for the YTD, 1yr, and SI time frames.[3]
Performance Review
The Emerging Markets and Ecommerce UCITS ETF (EMQQ) has posted a trailing year return of over 70% and
remains the best performing emerging markets ETF in the category.[4]
EMQQ rebounded from a
negative September to post over 5% return for the month of October, beating the
MSCI EM index. The best 5 contributors to EMQQ were, Netease Inc (China), Meituan
Dianping (China), Pinduoduo (China), and MercadoLibre (Argentina) and Tencent
(China), showcasing the continued strength in gaming and online consumption
growth across the more rural areas of China targeted by Pinduoduo. One of the
leading underperformers has, unsurprisingly, been the travel and ticketing
leader in China: Trip.com. However, given the Chinese turnout of domestic
travel during the national holiday and Mid-Autumn festival, we anticipate a
slow but sustained recovering in this subsector for our emerging markets ETF.
EMQQ Emerging Markets Internet & Ecommerce UCITS ETF Performance
October |
YTD* |
12 Month** |
5.69% |
55.71% |
70.16% |
Past performance is no guarantee of future performance.
Source: Bloomberg, HANetf
*YTD
figures based on 01.01.20 - 30.10.20
**12 Month figures based on 30.09.19
-30.10.20
With the Ant Group’s IPO
now on hold, it’s important to highlight how the digital payments story has
spread beyond China and throughout EMQQ’s holdings, becoming ubiquitous across
emerging economies.
The growth opportunity
presented by Ant should serve as an indicator of what’s to come in other
geographies like India’s Paytm, South America’s MercadoLlibre and StoneCo,
Africa’s Jumia, and Eastern Europe’s Yandex all aggressively expanding in the
space.
On the cusp of a digital
revolution, emerging markets are only now beginning to transform consumer
behaviours in a way that is allowing all areas of the economy to be impacted;
be it healthcare, education, banking, and even how we shop for groceries. With
fintech at the heart of all these transactions, the potential for the space is
significant and will continue to prove McKinsey and Co’s prediction back in
2012 that the emerging market consumer wave to be “the biggest growth
opportunity in the history of capitalism”.[5]
As the digitisation wave
spreads, India seems to be the next major opportunity in the global fight for
the prize of a billion digital consumers up for grabs, with the only difference
to China being a more open market and intense international competition. This
potential is not lost on the Indian government, however, as Modi appears to be
moving in the Chinese direction of protectionist policies as he recognizes the
incredible domestic potential to incubating homegrown names over global rivals.

For illustrative purposes only.
Source: NASSCOM Insights, 2020
The UPI, or Unified Payments Interface, was established in
2016 to facilitate digital and mobile based payments and has seen strong growth
amongst the connected population, yet with still only 25% of their 1.4 billion
population connected via a smartphone, the lions share of upside still remains.[6]
For illustrative purposes only.
Source: NASSCOM Insights, 2020
The Emerging Markets Internet and Ecommerce UCITS ETF
Total Return NAV to Date (up to 30/10/2020)
|
1M
|
3M
|
6M
|
YTD
|
12M
|
Since Inception
|
EMQQ Emerging Markets Internet & Ecommerce UCITS ETF (Acc)
|
5.69%
|
7.59%
|
55.84%
|
55.71%
|
70.16%
|
76.36%
|
EMQQ Emerging Markets Internet and Ecommerce Index (NTR)
|
5.78%
|
7.87%
|
56.59%
|
56.95%
|
71.94%
|
81.09%
|
EMQQ vs Key EM Competitors- as
of 10/30/2020 (For illustrative purposes only)

Source: Bloomberg, Oct 30, 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 if 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.[7]
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.[8]
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.[9]
Constituent News
Top 10 Constituents
|
Weight %
|
Meituan
|
9.36%
|
Alibaba Group Holding Ltd
|
8.62%
|
Tencent Holdings Ltd
|
7.92%
|
Naspers Ltd
|
6.31%
|
MercadoLibre Inc
|
6.27%
|
Pinduoduo Inc
|
5.43%
|
JD.com Inc
|
4.95%
|
NAVER Corp
|
4.59%
|
Prosus NV
|
4.42%
|
Baidu Inc
|
4.12%
|
Region Breakdown
|
Weight
|
Asia
|
78.17%
|
South America
|
9.17%
|
Africa
|
6.82%
|
Europe
|
5.84%
|
Sector Breakdown
|
Weight
|
Information Technology
|
5.95%
|
Financials
|
1.19%
|
Industrials
|
0.56%
|
Communication Services
|
39.04%
|
Consumer Discretionary
|
50.22%
|
Health Care
|
3.03%
|
Source: Bloomberg / HANetf. Data as of 30/10/20
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. Our emerging markets ETF 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
|
IE00BFYN8Y92
|
EUR
|
Acc
|
SIX
|
EMQQ SW
|
EMQQ.S
|
IE00BFYN8Y92
|
CHF
|
Acc
|
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