The newest ETF released by Emerging Global Shares focuses on the emerging market consumer, a niche area often overlooked. The Emerging Global Shares Dow Jones Emerging Consumer Titans ETF (NYSE:ECON) is composed of 30 stocks from the consumer goods and consumer services sectors.

IN PICTURES: 6 Millionaire Traits That You Can Adopt

The ETF, which began trading September 15, 2010, offers a new concept for investors searching for exposure to the growth of the middle class in the top emerging countries around the globe. (To learn more, see 6 Signs That You've Made It To Middle Class.)

Even though the ETF just began trading, the benchmark has been back tested to December 30, 2005. From the inception date through August 30, 2010 the index averaged an annualized return of 14.6%. During the same time the S&P 500 averaged an annual loss of 3.4%.

My belief that the best avenue for growth is through emerging and frontier markets is backed by the numbers over the last few years. Going forward the growth will be concentrated domestically within the emerging markets and will be focused on the consumers. ECON is the best product available for investors that want true exposure to the emerging market consumer.

Top Holdings
A total of ten countries are covered within the ETF, led by Mexico (20%), India (17%), Brazil (16%) and South Africa (14%). The top countries are not a surprise, but what did catch my eye is the exclusion of China from the top of the list. The largest emerging market country makes up 8.6% of the allocation, good for sixth place. China not a major player is not a concern because most investors have exposure to the country through various investments.

The number one holding is AmBev (NYSE:ABV) is based in Brazil and is the largest brewers of beer in South America. The stock recently hit a new all-time high as money flows into the country and more specifically the sector. The stock is currently trading with a fully valued P/E ratio of 20.4.

Another beverage company in the top six holdings is Fomento Economico Mexicano (NYSE:FMX), based in Mexico. Similar to ABV, the company focuses on Latin America and is trading at a new all-time high. The one major difference is the size of FMX (much smaller than ABV) and its valuation; FMX trades with a P/E ratio of only 6.3.

Two more stocks that trade in the U.S. round out the top ten holdings. Grupo Televisa (NYSE:TV), a major Mexican broadcasting/television company, makes up over 5% of the allocation. Also making up 5% of the allocation is Brazil Foods (Nasdaq:BRFS). The company sells everything from poultry to processed food products in Brazil and abroad.

The Road Ahead
When analyzing ECON it is clear the ETF is a niche, aggressive investment vehicle. That being said, investors who believe there will not be a double-dip recession, but stagnant growth in the U.S. should consider emerging markets. Within the emerging markets the biggest upside is for the consumer and ECON is your gateway into this exciting niche center.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Chart Advisor

    Watch This ETF For Signs Of A Reversal (BCX)

    Trying to determine if the commodity markets are ready for a bounce? Take a look at the analysis of this ETF to find out if now is the time to buy.
  2. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  3. Mutual Funds & ETFs

    ETFs Can Be Safe Investments, If Used Correctly

    Learn about how ETFs can be a safe investment option if you know which funds to choose, including the basics of both indexed and leveraged ETFs.
  4. Mutual Funds & ETFs

    The Top 5 Large Cap Core ETFs for 2016 (VUG, SPLV)

    Look out for these five ETFs in 2016, and learn why investors should closely watch how the Federal Reserve moves heading into the new year.
  5. Economics

    India: Why it Might Pay to Be Bullish Right Now

    Many investors are bullish on India for all the right reasons. Does it present an investing opportunity?
  6. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  7. Investing Basics

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  8. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  9. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  10. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>
Trading Center