New fund, avoiding Chinese companies, bets on e-commerce

Investors, wary of Chinese stocks, get a new way of betting on growth in the internet and e-commerce sectors in emerging economies.

Новый фонд, избегающий Китайских компаний, делает ставку на e-commerce

Фонд Next Frontier Internet and Ecommerce ETF (FMQQ) will closely monitor the index of online companies in emerging markets, excluding shares of Chinese companies. Among the largest in the index 60 companies — Singapore & quot; super application" Sea Ltd. and Argentine e-commerce platform Mercadolibre Inc.

The debut of the exchange-traded fund took place against the background of, that money managers are watching the growth of online shopping and services in emerging markets, caused by the pandemic. It also coincides with concerns about Beijing's regulatory crackdown and China Evergrande Group's debt problems..

In spite of this, Kevin T Foundation Founder. Carter says, that the new ETF is more likely to provide investors with a choice, bypasses the second largest economy in the world.

“We do not give up China, and we believe, that everyone went too far ", — he said in an interview. Nevertheless, "we know, that people are afraid of China, and if these fears get in the way of them — here's a great way to stay in the game. ".

Index, the underlying FMQQ, outperforms EMQQ, including China.

Carter says, that the new fund is intended to complement another ETF, which he ran in 2014 year — Emerging Markets Internet and Ecommerce ETF (EMQQ). This fund with a volume $1,3 billion. is the most successful US Emerging Markets ETF, tracked by Bloomberg over the past five years.

According to Carter, the new fund will follow the same investment objectives, as EMQQ, striving to capitalize on consumer trends among young, more tech-savvy generations, living in developing countries.

“From the point of view of e-commerce, there is no one more developed, than China. The rest of the developing world has four times as many people, and the penetration rate of e-commerce is one fifth ", — said Carter.

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Based on materials from Bloomberg

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