Episode summary
EMQQ ETF: Emerging Markets Internet & Ecommerce Growth Explained
ETF Spotlight
· · Hosts: Jeffrey Sherman, Bill Sokol · Guests: Kevin T. Carter
Summary
EMQQ Global founder and CIO Kevin T. Carter argues that traditional emerging-markets indexes miss the real growth engine: internet and ecommerce companies serving new consumers in China, India, Brazil, Southeast Asia and Africa. He says the original China ETFs were dominated by state-owned banks and oil companies, which pushed him toward a consumer-and-technology approach built around revenue from online activity rather than headquarters location or listing venue.
Carter says EMQQ focuses on companies that generate meaningful revenue from emerging-market internet and ecommerce, including names like Mercado Libre and Sea Limited, even when they trade outside their home country. He frames frontier exposure as geographic reach, not necessarily extra risk, and emphasizes minimum market-cap and liquidity screens. He also argues that China remains central to the story because its ecommerce market is far larger than other emerging markets, while sentiment around Chinese internet stocks is still overly negative despite improving fundamentals.
On portfolio construction, Carter contrasts EMQQ with MSCI Emerging Markets and broad index funds by saying those benchmarks are weighed down by state-owned enterprises and often miss the best internet leaders. Looking ahead, he expects AI to matter most in China, while much of the rest of the emerging world is still in an early stage of smartphone adoption and digital commerce expansion.
Key takeaways
- Kevin T. Carter says EMQQ is built to capture the growth of emerging-market internet and ecommerce, not the state-owned banks and oil companies that dominate many indexes.
- Carter says China is still the biggest ecommerce market in the world, with China's ecommerce more than half of global ecommerce and four times that of all other emerging markets combined.
- He argues frontier-market exposure is mainly geographic, because revenue can come from places like Bolivia or Paraguay even if a company is headquartered elsewhere.
- Carter says MSCI Emerging Markets has stagnated because state-owned enterprises represent about a quarter of the index and do not focus on profit growth.
- He expects AI to be a bigger story in China, while most other emerging markets are still about first-time smartphone adoption and basic digital services.
Notable quotes
“the thing that's emerging are 6.5 billion new consumers. So originally, I was focused on the emerging market consumer”
“We care about where your customers are. And I think a lot of your investors would be shocked to know that Mercado Libre is not included in the traditional index”
“China is by far the most developed country in the world, and it's not even close”
“And the biggest problem is the state-owned enterprises don't care about that and they represent a quarter of the index”
How the episode opens
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Seeking Alpha is not a licensed securities dealer, broker, US Investment advisor, or investment bank. Hey, everyone. Daniel Snyder here from Seeking Alpha for another episode of ETF Spotlight.
Today, we are diving into the world of emerging markets, and not only that, but the Internet side of things across emerging markets, which, obviously, people are looking for the growth, the growth aspect. Right? We have the Internet.
We have technology in America than of all the other developed countries. But today, where is the opportunity in emerging markets? And that is why I'm excited.
We are joined by Kevin T. Carter. He is Founder and Chief Investment Officer over at EMQQ Global.
We're going to dive into his fund today, EMQQ. Go ahead and look it up here on Seeking Alpha. Add it to your watch list.
And now, Kevin, let's get into the conversation. I love to start where we all start every episode is, where did this fund come from? Where did you see the need?
How did you develop the strategy? Can you give us a little background look? Sure.
Well, I got involved with emerging markets about 20 years ago and had some clients that asked me, they wanted to invest in China.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- emqq strategy
- emerging markets internet
- online consumption growth
- risk management
- geographic concentration
Companies and tickers mentioned
- EMQQ Global
Watch the episode
Watch “EMQQ ETF: Emerging Markets Internet & Ecommerce Growth Explained” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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