fbpx
QQQ
+ 1.31
311.52
+ 0.42%
DIA
-5.22
319.22
-1.66%
SPY
-2.36
384.73
-0.62%
TLT
+ 4.58
133.96
+ 3.31%
GLD
-4.03
169.90
-2.43%

So Much Emerging Markets For 2021 And This New ETF Could Be The Play

December 16, 2020 9:26 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
So Much Emerging Markets For 2021 And This New ETF Could Be The Play

It's the time of year when everyone makes market predictions for the upcoming year. Among the many investors are currently hearing, one of the most common is a bullish outlook for emerging markets stocks in 2021.

What Happened: The MSCI Emerging Markets Index is higher by 4.45% over the past month and will likely finish 2020 with a double-digit gain, but investors can go beyond the prosaic in search of bigger upside in 2021.

The newly minted Global X Emerging Markets Internet & E-commerce ETF (NASDAQ:EWEB) can provide the excitement of the emerging markets some investors will be looking for next year. Just over a month, EWEB tracks the Nasdaq CTA Emerging Markets Internet & E-commerce Net Total Return Index and taps into one of the more alluring themes in the developing world: e-commerce/online retail.

Why It's Important: As has been widely documented, the COVID-19 pandemic is packing years worth of growth for e-commerce into a matter of months, a trend applicable in international markets as well as here in the U.S.

“Notably, the dramatic enrichment of their internet business ecosystem and its impact on the future of these countries is especially compelling,” according to Consumer Technology Association (CTA) research. “Specifically, two trends lie at the heart of this deepening digital landscape in developing economies: the role of e-commerce companies as incubators for technology adoption and the COVID-19 pandemic as an accelerator for internet business evolution.”

EWEB seizes on the evolution of companies such as Alibaba (NYSE:BABA) and JD.com (NASDAQ:JD) from pure e-commerce firms to broader, more vertically integrated enterprises. The rookie ETF also provides exposure to companies that are in the early innings of transitioning to that model.

“A newer Chinese e-commerce company, Pinduoduo, is in the early stages of this model,” notes CTA. “By staking its future on addressing the rural e-commerce gap in China with the launch of a five-year, $7.1 billion campaign to reach these underserved consumers, the company is diversifying its business model. As a result, the company has now augmented its offerings beyond traditional e-commerce to AI-driven and demand-based delivery solutions, as well as a livestreaming service.”

What's Next: EWEB is just over a month old so it's too early to judge the fund on performance or size. That leaves potential, which the fund undoubtedly has.

“The potential of emerging markets rests not only in their investment potential, but the promise of groundbreaking technological innovation that can reverberate globally. Ultimately, the QNETEM index (EWEB's benchmark) offers a platform to showcase the companies behind these advancements to a greater audience,” according to CTA.


Related Articles

Should Amazon Try To Acquire Alibaba, Jumia Or eBay In 2021?

Every week, Benzinga conducts a survey to collect sentiment on what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios. read more

The Pandemic Changed The Way We Shop — And Revolutionized The Way We Sell

Shopify (NYSE: SHOP) shares skyrocketed over 270% in 2020 from their March lows as consumers turned to online shopping amid worldwide retail closures due to the coronavirus pandemic. In the third quarter, Shopify's merchant solutions revenue growth was up 48%. read more

Is Now The Time To Buy Stock In GameStop, Virgin Galactic Or Alibaba?

One of the most common questions traders have about stocks is “Why Is It Moving?” That’s why Benzinga created the Why Is It Moving, or WIIM, feature in Benzinga Pro. WIIMs are a one-sentence description as to why that stock is moving. Here’s why shares of GameStop, Virgin Galactic and Alibaba are moving. read more

'Fast Money' Panel's Top Stock Picks For 2021: Apple, Live Nation And More

On CNBC's "Fast Money Halftime Report," the investment committee gave some of their top stock picks for 2021. read more