These emerging funds offer long-term growth potential despite short-term inflation fears

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IInvestors are increasingly concerned about global inflation and rising interest rates. Inflation has risen around the world, pushing many emerging markets into a phase of stagflation, according to the Institute of International Finance. The International Monetary Fund’s latest report on the outlook for the world economy projects that global growth will slow to 3.6% in 2022 and 2023, from an estimated 6.1% in 2021. That’s 0.8 and 0.2 percentage point lower for 2022 and 2023 than the IMF forecast in January.

“The war in Ukraine has triggered a costly humanitarian crisis that demands a peaceful resolution,” the IMF report said. “At the same time, the economic damage caused by the conflict will contribute to a significant slowdown in global growth in 2022 and to inflation. Fuel and food prices have risen rapidly, hitting vulnerable populations in countries the hardest. low income.

But while short-term inflation and rate concerns are understandably at the heart of investors’ concerns, EMQQ Global’s stable ETFs in emerging markets – the Emerging Markets Internet & E-Commerce ETFs (NYSEArca: EMQQ)the Next Frontier Internet and E-Commerce ETF (FMQQ)and the recent launch Indian Internet & E-Commerce ETF (NYSE Arca: INQQ) – are all multi-decade themes, these concerns being increasingly taken into account.

“Across all of our portfolios, we’ve seen strong multiple compression while the real growth opportunity hasn’t changed at all,” said Akeem Bailey, director of research for EMQQ Global. “Rising concerns about inflation are creating deep pockets of value for long-term growth investors. Growth at a discount.

EMQQ includes access to EM businesses related to online retailers and the e-commerce industry. To be included in the ETF’s underlying index, companies must derive most of their profits from e-commerce or internet activities such as search engines, online retail, social media, video online, electronic payments, online games and online travel. China represents 53% of EMQQ’s underlying portfolio.

Investors who want exposure to internet companies in any emerging or frontier country outside of China can consider FMQQ, which uses the same investment strategy as EMQQ but does not contain China as one countries in which the fund invests. April 20 were South Korea at 31%, and Brazil and India at 18.3% each.

FMQQ seeks to provide investment results which, before fees and expenses, generally correspond to the price and yield performance of the Next Frontier Internet and Ecommerce Index (FMQQetf.com). Securities must meet a minimum market capitalization of $300 million and pass a liquidity filter that requires $1 million in average daily turnover.

Launched earlier this month, INQQ offers investors targeted exposure to India’s leading digitization companies. The fund seeks to provide investment results which, before fees and expenses, generally correspond to the price and yield performance of the India Internet and Ecommerce Index and holds approximately 20 stocks.

All securities eligible for inclusion in the index must generate more than 50% of Internet and/or e-commerce revenue in India, have a minimum market capitalization of $300 million and a liquidity screen of one average daily turnover of $1 million. The index is market capitalization weighted with a maximum exposure of 8% and is rebalanced semi-annually.

For more news, insights and strategy, visit our Emerging Markets Channel.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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