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Emerging markets

Emerging markets

Capturing the growth opportunity

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87%

87% of the world’s population are emerging and developing markets1

60%

60% projected share of GDP in 2026 (up from 43% in 2000)2

13%

13% of global share market capitalisation representing growth opportunity3

 
    1. Source: Oxford Business Group, 2020
    2. Source: IMF, April 2021
    3. Source: MSCI, June 2021

Why invest in emerging markets

Emerging markets are driving global growth


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Access large, increasingly affluent populations

87% of the world’s population are emerging and developing markets1

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Younger, increasingly educated demographics

77% of the world’s population between 15 and 24 live in emerging and developing markets2

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Emerging markets are at the forefront of the global technology revolution

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Gain diversification and access to sectors not well represented in the Australian share market

  1. Source: Oxford Business Group, 2020
  2. UN Youth Development and Participation, October 2020

Emerging markets dominate global GDP and outstrip G7

  • World
  • Major advanced economies (G7)
  • Combined EM
 
  • 2000-2006
  • 2007-2013
  • 2014-2020
  • 2021-2026

Source: IMF Data

Taking the right approach in emerging markets

Emerging markets are not a monolith and domestic factors play a huge role.

Being selective in emerging markets is important. It allows investors to avoid those countries with weaker fundamentals and prefer those emerging market economies that are better managed and therefore better insulated from geopolitical shocks that can occur in these developing nations.

At the company level, not all of emerging market corporates are desirable from an investment standpoint, many are state owned enterprises and inefficiencies allow astute investors to take advantage of mispricing.


VanEck has two ways investors can access emerging markets:

 

Equities

VanEck MSCI Multifactor Emerging Markets Equity ETF (ASX: EMKT) which provides investors with diversified access to companies that demonstrate four factors: Value, Momentum, Low Size and Quality, determined by global research giant, MSCI.

Bonds

VanEck Emerging Income Opportunities Active ETF (Managed Fund) (ASX: EBND) which takes an active, high conviction and benchmark agnostic approach to investing across the emerging market bond spectrum and has a targeted yield of 5% p.a.

Invest with the emerging markets experts

The depth and breadth of VanEck’s emerging markets expertise is unparalleled.

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VanEck has been investing in emerging markets for almost three decades.

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Our emerging markets experience is inimitable. The Emerging Markets Bonds Investment Team, for example, has an average of more than 25 years’ experience across a variety of market conditions and stages of the economic cycle.

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VanEck manages in excess of US$11.91 billion in emerging equities and bond markets across active and passive strategies.

1 – as at 31 July 2021

Emerging markets ETFs

INCOME

EBND

Emerging Income Opportunities Active ETF (Managed Fund)

  • Emerging markets bonds generally pay higher interest than developed markets bonds offering investors an opportunity to broaden their income horizon with elevated risk.
  • An actively managed benchmark-unaware approach that makes high conviction investments.
  • Target yield of 5% per annum
Equity

EMKT

MSCI Multifactor Emerging Markets Equity ETF

  • Emerging markets offer investors access to the fastest developing nations including China, South Korea and India. 
  • Taking a diversified approach across factors has been proven to produce out performance over the long-term compared to a benchmark market capitalisation approach.
INCOME

EBND

Emerging Income Opportunities Active ETF (Managed Fund)

  • Emerging markets bonds generally pay higher interest than developed markets bonds offering investors an opportunity to broaden their income horizon with elevated risk.
  • An actively managed benchmark-unaware approach that makes high conviction investments.
  • Target yield of 5% per annum
Equity

EMKT

MSCI Multifactor Emerging Markets Equity ETF

  • Emerging markets offer investors access to the fastest developing nations including China, Taiwan, South Korea and India. 
  • Taking a diversified approach across factors has been proven to produce out performance over the long-term compared to a benchmark market capitalisation approach.

Key risk

An investment in the Fund carries risks associated with: ASX trading time differences, emerging markets bonds and currencies, bond markets generally, interest rate movements, issuer default, currency hedging, credit ratings, country and issuer concentration, liquidity and fund manager and fund operations. See the PDS for details.


* In determining each month’s dividend VanEck will target an annual dividend yield for the fund of 5% p.a. of the capital invested at the beginning of the year. Dividend yields may differ for individual investors. From time to time we may amend this target.