ETFs & Funds
Home›ETFs & Funds›ETFs›New emerging markets ETF targets demographics and trim…
New emerging markets ETF targets demographics and trims major tech-linked exposure
The Pictet Emerging Markets Rising Economies ETF excludes Korea, Taiwan, and China, which together make up more than 70% of the standard MSCI EM benchmark.
Yahoo Finance, in an interview segment, discussed how traditional emerging markets ETFs can end up concentrated in tech-linked exposure by tracking the largest names in the MSCI EM benchmark.
The discussion focused on the Pictet Emerging Markets Rising Economies ETF, ticker RISE, which is designed to provide what the manager describes as true diversification by excluding Korea, Taiwan, and China entirely despite the trio accounting for more than 70% of the standard benchmark.
According to the guest from Pictet Asset Management, the portfolio thesis emphasizes demographic-driven growth in developing markets such as India, Brazil, Indonesia, and Mexico, arguing that working age population dynamics matter for GDP generation more than aging-economy exposure.
The segment also cited the role of dividends in long run returns, saying more than half of the MSCI EM benchmark’s total return has come from dividend yield rather than earnings growth or multiple expansion, and it argues for active management to better navigate EM currency, political, and regulatory risks.