Just One ETF: The New Fund Aimed at Local Goods for Emerging Consumers [View article]
Hi Charles,
Thinking more about this: perhaps the distinction you're looking for isn't whether the stocks in the fund are consumer stocks, but whether they are export-oriented or cater to the domestic market. A consumer good company, for example, which largely exports to the US isn't a play on the growth of emerging market consumers. Similarly, companies that provide domestic infrastructure and materials might actually have meaningful leverage to economic growth via the growth of consumption in emerging markets.
It would therefore be interesting to see an ETF sponsor come out with two ETFs which split emerging market stocks into "exporters" versus "non-exporters". I wonder how the non-exporters would correlate with ECON.
That might also be a justification for playing the growth of emerging market consumers with DGS vs. ECON. Small caps tend to be less export-oriented.
Just One ETF: The New Fund Aimed at Local Goods for Emerging Consumers [View article]
Thanks, Charles, for an excellent interview.
Philip Blancato also chose as his top pick an ETF (DGS) to play emerging market consumers (seekingalpha.com/artic...), but it was before ECON was available.
Since you didn't mention DGS as one of the alternatives to ECON, it would be interesting to hear your thoughts on it.
Just One ETF: The New Fund Aimed at Local Goods for Emerging Consumers [View article]
Thinking more about this: perhaps the distinction you're looking for isn't whether the stocks in the fund are consumer stocks, but whether they are export-oriented or cater to the domestic market. A consumer good company, for example, which largely exports to the US isn't a play on the growth of emerging market consumers. Similarly, companies that provide domestic infrastructure and materials might actually have meaningful leverage to economic growth via the growth of consumption in emerging markets.
It would therefore be interesting to see an ETF sponsor come out with two ETFs which split emerging market stocks into "exporters" versus "non-exporters". I wonder how the non-exporters would correlate with ECON.
That might also be a justification for playing the growth of emerging market consumers with DGS vs. ECON. Small caps tend to be less export-oriented.
Just One ETF: Taking Stock of the Emerging-Market Consumer [View article]
Just One ETF: The New Fund Aimed at Local Goods for Emerging Consumers [View article]
Philip Blancato also chose as his top pick an ETF (DGS) to play emerging market consumers (seekingalpha.com/artic...), but it was before ECON was available.
Since you didn't mention DGS as one of the alternatives to ECON, it would be interesting to hear your thoughts on it.
Just One ETF: Taking Stock of the Emerging-Market Consumer [View article]
It's interesting to compare the country and sector exposures. First, the top countries rounded to the nearest %:
DGS:
Taiwan 22%
South Africa 11%
Korea 10%
Thailand 10%
Israel 8%
Turkey 8%
Brazil 8%
EWX:
Taiwan 29%
China 12%
India 10%
South Africa 10%
Brazil 9%
That's a huge difference - EWX has much larger exposure to China and India. Any thoughts on how that will impact their performance?
Next, sector exposure:
DGS:
Industrials 24%
Financials 18%
Consumer Discretionary 16%
Tech 13%
EWX:
Tech 20%
Industrials 19%
Financials 17%
Consumer Discretionary 17%
Materials 11%
The big discrepancy here is tech - which also correlates with EWX's greater exposure to Taiwan. Any thoughts on how that will play out?
Again, thanks for a great interview.