the emerging markets internet + ecommerce etf...19 bilibili inc-sponsored adr bili uw equity usd...
TRANSCRIPT
1
THE EMERGING MARKETS INTERNET + ECOMMERCE ETF
Our Presentation will begin shortly…
Alibaba HQ, Hangzhou, China
Something BIG is Happening in Emerging Markets
November 2020
3
A Random Walk Down Wall Street
~30% of EEM & VWO
are SOEs1992
4
“I Pray Towards Omaha”
~30% of EEM & VWO
are SOEs1993
5
2005
“We want to invest in China”
6
The Case For Emerging Markets
7
What are Emerging Markets?
Emerging MarketsFrontier Markets
Source: MSCI Classifications as of November 2018
*MSCI & FTSE Disagree
AmericasBrazilChile
ColumbiaMexico
PeruArgentina
EuropeCzech Republic
GreeceHungaryPolandRussiaTurkeyCroatiaEstonia
LithuaniaKazakhstan
RomaniaSerbia
Slovenia
Middle EastEgyptQatar
United Arab EmiratesBahrainJordanKuwait
LebanonOman
AfricaSouth Africa
KenyaMauritiusMoroccoNigeriaTunisia
AsiaChinaIndia
IndonesiaKorea*
MalaysiaPakistan
PhilippinesTaiwan
ThailandBangladesh
Sri LankaVietnam
8
The Case for Emerging Markets
▪ Different - Diversification benefits vs. Developed Markets– Correlation to S&P 500 < 1.0
▪ Bigger - Larger Consuming Population– 85% of global population and 50% of global GDP
▪ Younger - Favorable Demographics– Millennials and Gen Xers spend 50% more time shopping online than
Baby Boomers and Seniors
▪ Growing Faster– Consumption
9
Emerging Markets are 85% of the World
5.6x6,205,000,000
1,095,000,000
-
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
Emerging & Frontier Markets Developed Markets
World Population
10
Emerging Markets Have Better Demographics
3,212,146,000
364,854,000
-
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
3,000,000,000
3,500,000,000
Emerging & Frontier Markets Developed Markets
World Population Under Age 30
8.8x
11
Emerging Markets are Passing Developed Markets
12
The Growth of the EM Consumer is THE Story
“…the biggest growth opportunity in the history of capitalism…”- McKinsey & Company
Source: McKinsey Global Institute
13
Investing in Emerging Markets
14
CONFLICTS OF INTERESTS
INEFFICIENT
POOR CORPORATE GOVERNANCE
WIDESPREAD CORRUPTION
SOEsCompanies owned and controlled
by the government in order to partake in commercial activities on
the government's behalf
Largest Emerging Market ETFs have ~30% in SOEs
#1 Problem: State Owned Enterprises (SOEs)
15
#1 Problem: State Owned Enterprises (SOEs)
~30% of EEM & VWO are SOEs
16
Oligarchs & Korean Chaebol = kind of SOEs
17
EM 3.0 - The Evolution of Emerging Markets Investing
Endowment and foundation emerging market exposure has gone through a number of phases over the years as familiarity and allocation grows so to does the variegated approach
Source: The Endowment Investor: http://endowmentinvestor.com/
18
Something Big is Happening in Emerging Markets:
The Great Confluence
19
The Growth of the EM Consumer is THE Story
“…the biggest growth opportunity in the history of capitalism…”- McKinsey & Company
Source: McKinsey Global Institute
20
Smartphones Still A Relatively New Thing
Apple CEO Steve Jobs demonstrated the first iPhone at the Macworld expo in 2007.
Leapfr
og E
ffect
21
Smartphones Changing Our Consumption Patterns
OLD WAY
22
Smartphones Changing Our Consumption Patterns
NEW WAY
23
Cheap Smart Phones – The First & Only Computer for EM
24
$531
$419
$338
$288 $262
$567
$259 $230 $246
$215
$0
$100
$200
$300
$400
$500
$600
North America Europe Middle East and
Africa
Latin America Asia/Pacific
AVERAGE SELLING PRICE OF A SMARTPHONE BY REGION
2013 2017
Region 2013 2017Price
Difference
North America $531 $567 6.80%Europe $419 $259 -38.20%Middle East and Africa $338 $230 -32.00%Latin America $288 $246 -14.60%Asia/Pacific $262 $215 -17.90%
Increasing Smartphone Affordability
25Source: Newzoo Data 2019, CapIQ, CB Insights
Mobile Broadband = First Internet Connection for EM
83%80% 79% 78%
74% 74%70%
66% 66%
61% 60%57%
54%50%
46% 45%
34%31% 30%
25%
19%16% 15%
Smartphone Penetration by Country% of Total Population (2019)
26
69
569
186
1,024
171
0
200
400
600
800
1,000
1,200
1,400
1,600
Tota
l Po
pu
lati
on
(m
illio
ns)
Smartphone Adoption by Population (2019)
Smartphone Penetration Still Early in Developing World
Source: Newzoo Data 2019, CapIQ, CB Insights
27
Result #1 = Massive Revenue Growth
Source: Bloomberg Data, Big Tree Capital LLC Analysis.EMQQ Index is not an investable product and the included time series data preceded the inception date of the live track record
$14,204 $20,870 $31,263
$43,378 $63,438
$87,942
$118,328 $138,473
$190,123
$257,424
$344,044
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
EMQQ Index Total Revenue2009-2019 ($MM)
- 10 Year CAGR of ~38%
Avg YoY Revenue Growth of EMQQ Holdings
89% 99% 65% 58% 37% 30% 29% 30% 29% 31%
28
Result #2 = Value Creation
Source: Big Tree Capital Data- The performance depicted is of the Index and is not an investible product and contains backdated data. Live performance can be found at www.emqqindex.com.
Gro
wth
in U
S $
Do
llars
592.28
111.71
$0
$100
$200
$300
$400
$500
$600
$700
Jun
-09
Dec
-09
Jun
-10
Dec
-10
Jun
-11
Dec
-11
Jun
-12
Dec
-12
Jun
-13
Dec
-13
Jun
-14
Dec
-14
Jun
-15
Dec
-15
Jun
-16
Dec
-16
Jun
-17
Dec
-17
Jun
-18
Dec
-18
Jun
-19
Dec
-19
EMQQ Index vs MSCI EEM Index
As of 5/31/2020
EMQQ
EEM
29
BABA - Largest IPO in U.S. History
30
U.S. VC Funding EM Entrepreneurs = Better Governance
31
U.S. China
Social Networks – Tencent (HK: 0700)
32
Mobile Payment Adoption is Pervasive
33
Mobile Payment Adoption is Pervasive
34
0.22.2 1.9
9.2
15.4
25.9
$-
$5
$10
$15
$20
$25
$30
2013 2014 2015 2016 2017 2018e
China's Total Online Transactional Value
($Trillions)
PC Mobile
AliPay54%
WeChat Pay38%
Others8%
China’s Mobile Payment Market Shares
Mobile Payment Adoption Rapidly Expanding
35
MELI – “The Amazon/PayPal of Latin America”
36
YNDX – “The Google & Uber of Russia”
37
MMYT – “The Expedia of India”
38
India: What to watch for – Flipkart IPO?
39
India: What to watch for – Reliance Jio IPO?
40
JMIA – “The Amazon.com of Africa”
41
Private Companies - Didi
42
Private Companies - Paytm
43
• Growth - The Great Confluence ‒ EM Consumer + Smartphones + Internet via Mobile Broadband ‒ Ecommerce models “leapfrogging” traditional models‒ Ecommerce growing 5x as fast as consumption
• Better Corporate Governance‒ No State-Owned Enterprises‒ Most companies backed by U.S. VC & trade on U.S. exchanges
• Exposure to Private Companies & Frontier Markets
The Case for the Emerging Markets Internet Sector
44
• Includes 83 Publicly Traded Emerging Markets Internet Companies
• Rules Based Index‒ All companies with >50% of revenue from internet and/or ecommerce
in emerging and frontier markets
‒ Minimum $300mm market capitalization
‒ Liquidity screen $1.0mm average daily turnover
‒ Rebalanced semi-annually in June & December
‒ Market Cap weighted with 8% maximum weight per security at rebalance
• More information at www.EMQQetf.com
• EMQQ also available in UCITS www.HANetf.com
EMQQ Index Overview
45
EMQQ Index Holdings (6.30.20)
Note- Holdings are subject to change.
Security Name Security Ticker Currency Weighting Security Name Security Ticker Currency Weighting
1 TENCENT HOLDINGS LTD 700 HK Equity HKD 7.81% 42 21VIANET GROUP INC VNET UW Equity USD 0.30%
2 ALIBABA GROUP HOLDING-SP ADR BABA UN Equity USD 7.13% 43 CHINA LITERATURE LTD 772 HK Equity HKD 0.27%
3 NASPERS LTD-N SHS NPN SJ Equity ZAR 6.90% 44 WEIMOB INC 2013 HK Equity HKD 0.20%
4 MEITUAN DIANPING-CLASS B 3690 HK Equity HKD 6.52% 45 MOMO.COM INC 8454 TT Equity TWD 0.20%
5 PINDUODUO INC PDD UW Equity USD 6.05% 46 ROCKET INTERNET SE RKET GY Equity EUR 0.20%
6 MERCADOLIBRE INC MELI UW Equity USD 5.95% 47 LEXINFINTECH HOLDINGS LTD LX UQ Equity USD 0.19%
7 PROSUS NV PRX NA Equity EUR 4.80% 48 TONGCHENG-ELONG HOLDINGS LTD 780 HK Equity HKD 0.18%
8 NAVER CORP 035420 KP Equity KRW 4.67% 49 WEIBO CORP WB UW Equity USD 0.17%
9 BAIDU INC - SPON ADR BIDU UW Equity USD 4.34% 50 FUTU HOLDINGS LTD-ADR FUTU UQ Equity USD 0.17%
10 NETEASE INC-ADR NTES UW Equity USD 4.32% 51 SO-YOUNG INTERNATIONAL-ADR SY UQ Equity USD 0.16%
11 JD.COM INC JD UW Equity USD 4.27% 52 DOUYU INTERNATIONAL HOLDINGS LTD DOYU UW Equity USD 0.16%
12 YANDEX NV CLASS A YNDX UW Equity USD 2.49% 53 KOOLEARN TECHNOLOGY HOLDING LTD 1797 HK Equity HKD 0.16%
13 SEA LTD SE UN Equity USD 2.29% 54 CJ ENM CO LTD 035760 KQ Equity KRW 0.15%
14 DELIVERY HERO SE DHER GY Equity EUR 2.27% 55 QIWI PLC-SPONSORED ADR QIWI UW Equity USD 0.14%
15 ALIBABA HEALTH INFO TECH LTD 241 HK Equity HKD 2.09% 56 COM2US CORP 078340 KQ Equity KRW 0.13%
16 TRIP.COM GROUP LTD TCOM UW Equity USD 1.89% 57 AFYA LTD AFYA UW Equity USD 0.13%
17 NCSOFT CORP ORD 036570 KP Equity KRW 1.76% 58 360 FINANCE INC -ADR QFIN UQ Equity USD 0.12%
18 KAKAO CORP 035720 KP Equity KRW 1.71% 59 BITAUTO HOLDINGS LTD ADR BITA UN Equity USD 0.12%
19 BILIBILI INC-SPONSORED ADR BILI UW Equity USD 1.56% 60 MAKEMYTRIP LTD MMYT UW Equity USD 0.12%
20 TENCENT MUSIC ENTERTAINMENT GROUP TME UN Equity USD 1.15% 61 HEADHUNTER GROUP PLC-ADR HHR UW Equity USD 0.12%
21 KINGSOFT CLOUD HOLDINGS LTD KC UW Equity USD 1.15% 62 BAOZUN INC BZUN UW Equity USD 0.11%
22 PAGSEGURO DIGITAL LTD PAGS UN Equity USD 1.12% 63 LOCAWEB SERVICOS DE INTERNET LWSA3 BS Equity BRL 0.11%
23 VIPSHOP HOLDINGS LTD VIPS UN Equity USD 1.08% 64 HENGTEN NETWORKS GROUP LTD 136 HK Equity HKD 0.11%
24 KINGDEE INTERNATIONAL SFTWR 268 HK Equity HKD 1.07% 65 YIXIN GROUP LTD 2858 HK Equity HKD 0.11%
25 PING AN HEALTHCARE AND TECHNOL 1833 HK Equity HKD 1.07% 66 NHN CORP 181710 KP Equity KRW 0.10%
26 STONECO LTD STNE UW Equity USD 0.97% 67 NETDRAGON WEBSOFT INC 777 HK Equity HKD 0.10%
27 GSX TECHEDU INC- ADR GSX UN Equity USD 0.96% 68 QUTOUTIAO INC QTT UW Equity USD 0.09%
28 AUTOHOME INC-ADR ATHM UN Equity USD 0.89% 69 CVC BRASIL OPERADORA E AGENCIA CVCB3 BS Equity BRL 0.08%
29 58.COM INC WUBA UN Equity USD 0.82% 70 DESPEGAR.COM CORP DESP UN Equity USD 0.08%
30 MAIL.RU GROUP-GDR REGS MAIL LI Equity USD 0.72% 71 MEITU INC 1357 HK Equity HKD 0.07%
31 B2W CIA DIGITAL BTOW3 BS Equity BRL 0.70% 72 AFREECATV CO LTD 067160 KQ Equity KRW 0.07%
32 KINGSOFT CORP LTD 3888 HK Equity HKD 0.67% 73 HUYA INC-ADR HUYA UN Equity USD 0.06%
33 JOYY INC YY UW Equity USD 0.53% 74 PC HOME ONLINE INC 8044 TT Equity TWD 0.06%
34 51JOB INC-ADR JOBS UW Equity USD 0.52% 75 MAOYAN ENTERTAINMENT 1896 HK Equity HKD 0.06%
35 IQIYI INC IQ UW Equity USD 0.51% 76 UXIN LTD UXIN UW Equity USD 0.05%
36 MOMO INC MOMO UW Equity USD 0.44% 77 KGINICIS CO LTD 035600 KQ Equity KRW 0.05%
37 MULTICHOICE GROUP LTD MCG SJ Equity ZAR 0.43% 78 SOGOU INC SOGO UN Equity USD 0.05%
38 INFO EDGE INDIA LTD INFOE IS Equity INR 0.39% 79 QUDIAN INC SPONSORED ADR CLASS A QD UN Equity USD 0.05%
39 SINA CORP SINA UW Equity USD 0.37% 80 FINVOLUTION GROUP FINV UN Equity USD 0.05%
40 ZHONGAN ONLINE P&C INSURANCE C 6060 HK Equity HKD 0.35% 81 CAFE24 CORP 042000 KQ Equity KRW 0.05%
41 ALIBABA PICTURES GROUP LTD 1060 HK Equity HKD 0.30% 82 JUMIA TECHNOLOGIES AG-ADR JMIA UN Equity USD 0.05%
83 JUST DIAL LTD JUST IS Equity INR 0.04%
46
Buy, Sell or Hold? EMQQ Index Valuation Data
2015 2016 2017 2018 2019 8/31/2020
Forward
PE
YoY Rev
Growth
Forward
PE
YoY Rev
Growth
Forward
PE
YoY Rev
Growth
Forward
PE
YoY Rev
Growth
Forward
PE
YoY Rev
Growth
Forward
PE
Est YoY
Rev Growth
EMQQ 47.73 30.1% 33.39 28.7% 26.12 30.2% 16.08 28.9% 25.65 33.0% 34.35 19.3%
FAANG 89.23 23.8% 46.65 8.6% 44.75 19.2% 32.93 24.0% 34.99 12.2% 46.32 11.9%
BAT 30.34 33.7% 27.95 25.9% 31.58 44.3% 24.96 41.1% 24.88 25.6% 26.73 23.6%
S&P 16.82 -3.3% 17.58 2.2% 18.66 7.2% 14.88 9.0% 18.82 5.4% 27.31 -9.0%
Source: Bloomberg Data, Big Tree Capital LLC Analysis. Index constituent data captured at year end.EMQQ Adjusted Forward PE for all valuations <500
30.1%28.7%
30.2%28.9%
33.0%
19.3%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2015 2016 2017 2018 2019 2020 Est
Average Annual YoY Revenue Growth
FAANG
EMQQ
S&P
PEG Ratio Reasonable
47
Impacts from Coronavirus
48
Social Distancing in Emerging Markets a Big Challenge
Dharavi slum in Mumbai has a population of ~700,000 living in 0.81 square miles.
49
• Emerging and Frontier markets may suffer the most (India, Indonesia, etc.)– Dense populations + weaker sanitation and health care
– 7.28.20 – report 57% of people in Mumbai slums test positive for antibodies
• China’s many advantages have allowed it to largely contain CV – Leadership and population have experience with similar outbreaks
– Less bureaucracy & coordinated centralized health care
– Advanced and distributed technology including an App for Contact Tracing
• China looks like the one economy that resume quickest and suffer the least– Estimates of 70-80% levels of economic activity
– Starbucks, Apple & Tesla are reporting resumption of business
• Internet & Ecommerce based business models are getting a boost from CV– Surge in demand of widely adapted Ecommerce businesses
– Accelerated adaption of certain platforms (Distance Learning, Telemedicine, Food Delivery, etc.)
• EMQQ is particularly well positioned:– China is 65% of EMQQ and China is in the best position of any major economy
– Ecommerce is increasing in relative importance as a result of the outbreak
– Digitalization will stabilize at a much higher level
Our Speculation on Near Term Outlook (as of 11.1.20)
50
U.S.-China Trade War &“Delisting of Chinese Companies in U.S.”
51
• Passed Senate (05/20/2020)
• Sponsor Senator John Kennedy R. LA (used to be a Democrat)
• This bill requires certain issuers of securities to establish that they are not owned or controlled by a foreign government. Specifically, an issuer must make this certification if the Public Company Accounting Oversight Board is unable to audit specified reports because the issuer has retained a foreign public accounting firm not subject to inspection by the board. Furthermore, if the board is unable to inspect the issuer's public accounting firm for three consecutive years, the issuer's securities are banned from trade on a national exchange or through other methods.
• Foreign issuers of securities that use such a firm to prepare an audit report must disclose for each non-inspection year
• the percentage of shares owned by governmental entities where the issuer is incorporated,
• whether these governmental entities have a controlling financial interest,
• information related to any board members who are officials of the Chinese Communist Party, and
• whether the articles of incorporation of the issuer contain any charter of the Chinese Communist Party.
• Summary: Would require foreign companies listed in U.S. to:1. Grant the PCAOB access to review their audits
2. Confirm they are “not owned or controlled by a foreign government”
– % of shares owned by government entities
– Identify Chinese Communist Party members board members
– If companies do not adhere to above for three years they would be delisted
S. 945 - Holding Foreign Companies Accountable Act
52
• 4 Groups of Companies
• Group 1 - 12 State Owned Enterprises (11 now)
• All on NYSE
• Many pre-date Sarbanes-Oxley (ex: China Mobile NYSE: CHL 1997, Sinopec NYSE: SNP 2000)
• SMIC delisted in 2019 and listed in HK in response to trade hostility focused on semiconductors
• Legitimate national security and state secrets for Chinese government
• We advise against owning SOEs anyhow due to conflicts of interest, inefficiencies and corruption
• Group 2 - 25 EMQQ companies
• All on NYSE or NASDAQ Global Select (The “main” NASDAQ)
• Includes 2 former EMQQ companies (RENN & LITB) that declined below $300mm Market Cap
• Group 3 - 16 Non SOEs or EMQQ (Education, Medical/Biotech, Financial Services)
• All on NYSE or NASDAQ Global Select (The “main” NASDAQ)
• Group 4 - ~100 Very Dubious “penny stocks”
• Most trade on NASDAQ Global Market or NASDAQ Capital Market
• Tell tale signs of “pump and dump” “Wolf of Wall Street”/”Boiler Room”
• Fringe investment banks and “bucket shop” broker dealers (ex: Rodman & Renshaw, Roth Capital, Maxim, ViewTrade Securities, EarlyBirdCapital, etc.)
• Homework: Watch Netflix documentary The China Hustle
Review of the 156 Chinese companies on PCAOB list
53
• Fang Xinghai, Vice Chairman of CSRC has repeatedly said China is sincere in wanting to resolve the issue– Fang went to Washington D.C. in September 2019 but was big timed by PCAOB Chairman Duhnke
– April 2020 China relented on U.S. demand that pilot program focus on an SOE
• Needs to be passed by House of Representatives and signed by the President to go into effect– Current Bill says companies would be delisted if out of compliance for 3 years
– Serious Lobbying & Election coming fast – political value will decline afterwards
• Risk of capital loss resulting from S. 945/“Delisting” and shareholders of U.S. listed Chinese companies – including EMQQ - “losing their money” is de minimis
• If S. 945 is passed and EMQQ companies can’t comply they can easily list in Hong Kong as Many already have (BABA, JD.com, Netease) and won’t affect EMQQ ability to own
• Could also trade in U.S. OTC as unsponsored ADRs as Tencent does (TCEHY)– TCEHY trades USD $265,000,000 a day
• Chinese government may actually favor and incentivize the increase in Hong Kong listings
• No matter what China - U.S. tensions will continue to pose real and headline risks
Summary Outlook on S. 945 (Delisting Chinese Stocks)
54
China Sentiment Making All Time Lows
Note: Those who did not answer are not shown.
Source: Summer 2020 Global Attitudes Survey. “Unfavorable Views of Chine Reach Historical Highs in Many Countries”
73%
73%
85%
75%
74%
73%
71%
71%
70%
63%
62%
86%
81%
75%
73%
22%
23%
14%
22%
22%
25%
24%
25%
26%
36%
38%
9%
15%
24%
24%
U.S.
Canada
Sweden
Denmark
UK
Netherlands
Belgium
Germany
France
Spain
Italy
Japan
Australia
South Korea
14 Country Median
Unfavorable Views of China% who have a __ view of China
Very/Somewhat Unfavorable Very/Somewhat Favorable
55
Ant Group
56
Ant Group - The Largest IPO Ever?
57
Ant Group - The Largest IPO Ever? (11.2.20)
• Ant Booming Financially‒ 80 million businesses‒ 711 Million Monthly Users‒ Processed $17 trillion in transaction 12 months ended 6.30.20‒ $10 billion revenue 6 months 2020‒ $3 billion net income 6 months 2020 = 30% margin!‒ 40% revenue growth YoY
• $35 Billion IPO‒ Could hit $39.5 Billion if they fill the shoe‒ $315 Billion Market Cap – larger than JP Morgan Chase‒ Dual Listing in Shanghai (SSE: 688688) and Hong Kong (HKE: 6688)‒ Will create 18 new Billionaires in one day! 7 new women Billionaires!!‒ May “break the Chinese stock market”
‒ Shanghai Star market frenzy – Robinhood effect x 5‒ 20x leverage for IPO in Hong Kong‒ IPO oversubscribed by 870x - $3 Trillion USD of orders‒ A Share premium!
58
Ant Group - The Largest Broken Trade Ever (11.3.20)
• Disrupting the Disruptor - Beijing Pulls the Plug
1. Ant Group is a Disruptor‒ China, like all countries, Has A Regulated Financial System‒ Ant has had to appease the massive existing financial system - which is
largely state owned - and has myriad vested interests in the Chinese banking ecosystem including the central government
‒ One of the reasons they changed their name/identity and business away from “finance” and towards “technology”
‒ Disruptor - turned enabler - turned disruptor
2. Jack Ma poked the establishment at Bund Summit with PBOC Governors Zhou Xiaochuan (former) & Yi Gang in the audience
‒ Called existing regulations a “Club of old people”‒ Called existing banks “pawn shops”‒ China needs more “policy experts, but not experts in red tape.”‒ “Risk-free innovations stifle innovation.” + “Your risk-free departments are
putting the entire economy at the risk of non-development.”
59
Ant Group – Disruptor of China’s Financial Sector?
The Problem is Here
60
Ant Group – What Now?
• Issue is with CreditTech platforms‒ Huabei – ~“Just Spend” is a consumer credit offering for shoppers on
BABA ecommerce platforms‒ Jiebei – ~“Just Borrow” is a microloan provider
• Potential Regulatory Changes that could slow Ant’s growth and/or profitability– tougher rules on funding of online loans– lowering of caps on lending rates– requirement of more profit sharing with the banks– defining CreditTech as a banking unit
• Ant may need to set up a financial holding company and comply with PBOC rules on capital requirements and leverage
• Don’t expect Ant IPO until 2021
61
The Future Of Emerging Markets is Here.
Q & A
62
THE EMERGING MARKETS INTERNET + ECOMMERCE ETF
Connect with us.
Kevin T. CarterFounder & [email protected]
Kyle [email protected]
Lee G. StapletonChief Marketing [email protected]
63
Kevin T. Carter Mr. Carter is the Founder of The Emerging Markets Internet & Ecommerce ETF (NYSE: EMQQ). He has been a featured speaker forColumbia Business School, Bloomberg, Guggenheim Partners, Morningstar and the CFA Society. Previously, Mr. Carter was theFounder & CEO of AlphaShares, an investment firm offering China focused ETFs in partnership with INVESCO. Mr. Carter wasalso the Founder & CEO of Active Index Advisors acquired by Natixis in 2005 and the Founder & CEO of eInvesting acquired byETRADE in 2000. Mr. Carter received a degree in Economics from the University of Arizona and began his career in 1992 withRobertson Stephens & Co.
Dr. Burton Malkiel
Dr. Malkiel serves as an Advisor to EMQQ. Dr. Malkiel is the Chief Investment Officer of WealthFront and a long time Professor ofEconomics at Princeton University. In 2002 he was a co-Founder and Chief Investment Officer of Active Index Advisors. He iswidely considered one of the pioneers of index investing and ETFs. He has served as a member of the Board of Directors ofVanguard, Dean of the Yale School of Management and as Chairman of the Princeton University Economics Department. Dr.Malkiel is also well known for his seminal work A Random Walk Down Wall Street. Dr. Malkiel holds B.A. and MBA from Harvardand a Ph.D. from Princeton University.
Richard KangMr. Kang is a Member of the EMQQ Index Committee. Mr. Kang has the experience of over 25 NYSE listed ETF launches and waspreviously the Chief Investment Officer of EGShares and Portfolio Manager of the Columbia Emerging Markets Consumer ETF(NYSE: ECON). Over his 20 years of buy-side experience, Richard has had senior roles at a hedge fund, fund-of-hedge fund,investment counseling firm, index provider and ETF issuer/managers. He sits on FTSE's Country Classification IndexingCommittee as well as the editorial board of Institutional Investors' The Journal of Index Investing, the only academic journal forthe indexing and ETF industry.
Linda H. Zhang, Ph.D.Dr. Zhang serves as a Member of the EMQQ Index Committee. She is the CEO of New York based Purview Investments, a firmspecializing in active ETF managed solutions and ETF innovation. Her career spans from quantitative analysis at Baring AssetManagement, multi-asset portfolio management at Blackrock and MFS, to leading the investment team at Windhaven. She is arecipient of Top Women in Asset Management 2015 by Money Management Executive and a co-founder of Women in ETFs. Sheholds B.A. from University of Regina, Canada, M.S. and Ph.D. in Finance from University of Massachusetts at Amherst.
EMQQ Team
64
Kyle ParkerMr. Parker serves as President of EMQQ. Prior to EMQQ, Mr. Parker worked at Progress Investment Management Co., the San Francisco based firm focused on minority and women-owned emerging managers. He previously worked at AlphaShares, an investment firm founded by Mr. Carter and Dr. Malkiel, offering Emerging Markets and China focused ETF’s in partnership with Guggenheim Investments. Mr. Parker holds a B.A. in Economics from the University of California, Santa Barbara.
Lee Stapleton
Ms. Stapleton serves as Chief Marketing Officer of EMQQ. Prior to EMQQ, Ms. Stapleton founded two internationally successful impact campaigns promoting economic, social and environmental sustainability. Ms. Stapleton received a degree in Spanish, Nonprofit Management & Leadership Studies, and Public Administration, with a pooled concentration in Environmental Studies from the University of North Carolina Wilmington.
Lin LiLin Li serves as an Advisor to EMQQ. Mr. Li is a Portfolio Manager at Huatai Securities, a Chinese investment manager based in Nanjing trading Chinese equities and index derivatives on mainland (Shanghai & Shenzhen) and international markets (Hong Kong and New York). Previously, Mr. Li was as an analyst for AlphaShares, an Emerging Markets investment firm located in San Francisco. He holds Master’s degree in Financial Analysis from University of San Francisco and a B.S. in Engineering from Chongqing University in China.
EMQQ Team
Latif NathaniMr. Nathani serves as an Advisor to EMQQ. He was most recently the CEO of eBay India. He grew the business from under $200M GMV in 2013 to nearly $500M GMV in 2016 and 5M+ customers. He exited with the sale of eBay India to Flipkart. Previously Latif co-founded eMemories.com and 2 enterprise businesses at Microsoft. He also led global product marketing at Symantec and named/launched Norton 360. Latif has 27 years of technology industry experience, including 15 years at Microsoft. Latif graduated with an MBA from City University and B.S. Computer Science from the University of Arizona in 1991.
Ms. Benson serves as Director of Business Development at EMQQ. Prior to joining EMQQ Kira led business development efforts in the West Coast at MARS SalesFocus Solutions, a provider of distribution intelligence for the asset management industry and Captec Systems, a provider of investor relations technology solutions. Previous to this Kira spent 7 years in London working in investor relations and relationship management at both BlueBay Asset Management and BlackRock. Preceding her move to London Kira worked with institutional clients in securities lending at BlackRock’s San Francisco office. Kira began her career at Morgan Stanley’s Graystone Consulting after graduating from the University of California, Santa Barbara.
65
Disclosures:
Carefully consider the Fund's investment objectives, risk factors, charges and expenses before investing. This and additional information
can be found in the Fund's prospectus, which may be obtained by visiting www.emqqetf.com. Read the prospectus carefully before
investing.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return
and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than
their original cost and current performance may be lower or higher than the performance quoted. Shares are bought and sold at market
price and not individually redeemed from the fund. Brokerage commissions will reduce returns. For performance current to the most
recent month-end, please visit www.emqqetf.com.
Investing involves risk, including the possible loss of principal. Investments in smaller and mid-sized companies typically exhibit higher
volatility. The fund is non-diversified. International investing may involve risk of capital loss from unfavorable fluctuations in currency
values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Emerging
markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Frontier markets
generally have less developed capital markets than traditional emerging market countries, and, consequently, the risks of investing in
foreign securities are magnified in such countries. These countries are subject to potentially significant political, social and economic
instability, which could materially and adversely affect the companies in which the Fund may invest. The Fund invests in the securities of
Internet Companies, including internet services companies and internet retailers, and is subject to risk that market or economic factors
impacting technology companies and companies that rely heavily on technology advances could have a major effect on the value of the
Fund’s investments.
Exchange Traded Concepts, LLC (ETC) serves as the investment advisor, and Penserra Capital Management LLC serves as a sub
advisor to the fund. Big Tree Capital LLC serves as index provider. The Funds are distributed by SEI Investments Distribution Co.
(SEI) 1 Freedom Valley Drive, Oaks, PA, 19456.
Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot
invest directly in an index. The Net Asset Value is calculated each day the national securities exchanges are open for trading, as of the
close of regular trading on the New York Stock Exchange, normally 4:00 p.m. ET. Closing price returns are based on the midpoint of the
bid/ask spread at 4:00 pm ET, and do not represent the returns you would receive if you traded shares at other times.