The EMQQ Emerging Market Internet and Ecommerce UCITS ETF has been unveiled as the debut product from HANetf, Europe’s first independent white-label ETF platform. The ETF is scheduled to list on the London Stock Exchange on 5 October 2018.

Hector McNeil, co-CEO of white-label ETF provider HANetf.

The fund is linked to the EMQQ Index, an index providing exposure to companies driving the growth of online consumption in the developing world.

To be included in the index, companies must derive more than half their profits from ecommerce or internet activities within emerging or frontier markets. Such activities include online search, retail, social networks, video, gaming, and e-payment systems.

A firm must also have a minimum market capitalization of $300 million and a three month average daily turnover of at least $1 million to be eligible.

Unlike typical emerging market indices, securities do not need to be listed in an emerging market to be eligble – companies such as Alibaba are listed in the US, for example – and can also include depository receipts such as ADRs and GDRs.

The index currently contains over 50 constituents, weighted by market-capitalization with a single security cap of 8%. Reconstitution and rebalancing occur on a semi-annual basis.

Stocks from China make up half (50.7%) of the total index weight, followed by firms listed in the US (13.8%), Hong Kong (11.3%), South Korea (10.0%) and South Africa (6.4%). Tencent, Naspers, and Alibaba are all near the maximum 8% weighting, while the index also provides significant exposure to JD.com (6.7%) and Baidu (6.5%).

EMQQ’s strategy is also available in the US through the EMQQ Emerging Market Internet and Ecommerce ETF (EMQQ US), which is listed on the NYSE Arca and home to over $370m in assets under management.

Kevin Carter, CEO of Big Tree Capital and Founder of EMQQ Index Committee, commented, “We are excited to be launching EMQQ in Europe with HANetf. Their experience, knowledge of the market, and entrepreneurial spirit make them the ideal partner for us or anyone else looking to enter the European ETF market. We believe that European investors will benefit from gaining pure exposure to the fast growing and innovative internet companies in emerging markets which we believe is the best way to access the growth of the digital consumers in this large and important part of the world.”

Hector McNeil, Co-CEO of HANetf, added, “EMQQ is an ideal strategy for our first launch, being highly innovative and unique to the European market. US and Asian managers who haven’t entered the European ETF market are a major target for HANetf. Prior to the advent of HANetf, overseas US and Asian ETFs have struggled to enter Europe coherently mainly due to the added complexity of multiple exchanges and settlement systems, languages, currencies, local laws and many other things that don’t exist in their home markets. HANetf greatly improves new ETF issuers chances of success. Add that to a great ETF such as EMQQ, this is a great way to launch HANetf onto the European ETF landscape.”

The fund has a total expense ratio (TER) of 0.86% and will be available to trade in US dollars (EMQQ LN) and in pound sterling (EMQP LN).