Emerging Markets ETF Monthly Report | November

Emerging Markets ETFKey Takeaways | November

The underlying index for theEmerging Markets ETFreturned -4.64% in September. Year to date the Index is down -4.73%.

The leading positive contributors to performance for the EMQQ Index were PDD Holdings (Pinduoduo) and Netease posting gains of 12.2% and 4.1% respectively. Pinduoduo climbed after a series of analyst upgrades on the back of strong growth momentum in the local Chinese e-commerce market. Meanwhile Netease China’s second largest online game developer got an added boost from a string of new game approvals during the month.

The two largest detractors for the month were Baidu and Alibaba declining -22.9% and -6.4% respectively. Both companies followed global markets lower on the back on higher yields in the U.S. Nonetheless both companies remain on steady ground as they continue to focus on cost cutting measures to bolster profitability this year while also launching a series of AI-related products that will future-proof their businesses for growth in years to come.

Source of all performance data: HANetf / Bloomberg. Data as of 31.10.2023. Please note that all performance figures are showing net data. Past performance is not indicative of future performance and when you invest in ETFs your capital is at risk.

Emerging Markets Tech News

Mercadolibre Reports Strong Q3 Results:Latin America’s e-commerce and fintech behemoth Mercadolibre reported a better-than-expected 178% surge in third-quarter net profit after sales grew across all its markets especially in Brazil. Total net revenue was around $3.8 billion in the quarter ended in September up over 39% year-on-year. While the company originated as an e-commerce company in the early 2000s its digital advertising and fintech units continue to help it maintain its strong growth. Mercadolibre remains a core top holding in both the EMQQ and FMQQ Indexes.

IMF Upgrades China GDP Growth:The IMF recently revised its GDP estimates for China upwards to 5.4% for 2023 reflecting stronger than expected growth in the third quarter and new policy measures to help stimulate the economy further. While the recovery in China has been uneven this year green shoots are emerging that the economy is gaining momentum. At 5.4% GDP growth China would be the world’s second fastest growing major economy this year behind only India.

India Leads World in Middle Class Formation:According to the World Data Lab over 112 million consumers are expected to join the ranks of middle-class consumers in 2024. A vast majority of that will come from Asia with India leading the pack. Next year India is expected to mint close to 33 million new middle-class consumers roughly 30% of the global total. That will be followed by China with 31 million net additions. Together around 57% of new consumers in 2024 will hail from India and China alone.

Indian E-Commerce Jumps During Festive Season:E-commerce companies in India are looking forward to a strong festive season of online shopping in 2023. Local consumers are projected to spend a record $11 billion during the month which would represent a 20% increase from the previous year. The country’s leading e-commerce platform Flipkart set a new benchmark with 1.4 billion customer visits during its Big Billion Days festive season sale which took place between October 8 and 15 this year.

Nubank reaches 90 million customers:Brazil-based Nubank one of the world’s largest digital banks recently surpassed the milestone of over 90 million customers in Latin America. The growth in the customer base follows the expansion of the company’s product portfolio -including insurance investments loans among others. In 2023 Nubank has already launched more than 40 new products and resources. Nubank’s tremendous growth over the last decade highlights the powerful leapfrogging effect digital businesses can have in traditional sectors in emerging markets.

Digital Economy in Southeast Asia to Surpass $100 Billion:According to a recent joint report by Google Temasek and Bain & Company the digital economy in SE Asia is set to reach $100 billion in revenue this year growing at a 27% CAGR since 2021. The report also highlighted a increasing focus on monetization as local internet companies continue to bolster their profitability.

90% of Young People Will Live in Emerging Markets by 2027:According to Euromonitor close to 90% of Millennial and Gen-Z consumers will reside in an emerging market by 2027. These young and digital-savvy consumers will help drive close to two-thirds in global e-commerce growth over the next five years.

Emerging Markets ETFPerformance
As of 31.10.2023

1M

3M

6M

YTD

12M

2Y

3Y

SI

EMQQ Emerging Markets Internet & Ecommerce UCITS ETF

-4.68%

-15.45%

-4.68%

-5.36%

24.79%

-44.34%

-48.59%

-9.34%

EMQQ Emerging Markets Internet & Ecommerce Index&trade

-4.64%

-15.28%

-4.24%

-4.73%

25.81%

-43.26%

-47.07%

-4.15%

Please note that all performance figures are showing net data.Source: Bloomberg / HANetf. Data as of 31/10/2023

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled &lsquoRisk Factors’ for further details of risks associated with an investment in this product. Please remember that when you invest in ETFs and ETCs your capital is at risk.