iShares Launch MSCI Emerging Markets Consumer Growth UCITS ETF

iShares in the UK has launched of the iShares MSCI Emerging Markets Consumer Growth UCITS ETF

iShares MSCI Emerging Markets Consumer Growth UCITS ETF is an exchange traded fund (ETF) that aims to track the performance of the MSCI ACWI Emerging Markets Consumer Growth Index as closely as possible. The ETF invests in physical index securities. The index offers exposure to large and mid-cap consumer oriented stocks that derive high or growing revenues from emerging markets. The index is free float market capitalisation weighted.

The Exposure-based index is constructed with developed market stocks that generate a significant portion of their revenues from emerging market countries, while eschewing stocks that are domiciled and listed in emerging countries.

Exposure indices are designed to capture the growth of emerging markets while mitigating the tail risk that comes from periodic crises in those markets (e.g., political disturbances, currency controls, etc.

Investing in emerging markets via developed market companies enables investors to avoid some of the currency risk of direct international investing, since only a portion of each developed market company is exposed to the lower liquidity and elevated hedging costs associated with emerging markets currencies. Moreover, some of the highest-quality and most stable developed markets companies have made great inroads into emerging economies, and investors can benefit from emerging markets’ economic growth via companies that are well known to them. 

A New Way of Capturing Emerging Markets Growth Opportunity

Capital Idea: Consider using economic exposure to map portfolios instead of country of domicile.