NEW YORK (TheStreet) -- From its 2003 inception to its peak in October 2007 the iShares MSCI Emerging Markets ETF (EEM) was up 350%, compared to 77% for the SPDR S&P 500 (SPY). Since that peak, EEM is down 22%. Where the last decade was early days in the emerging market theme, it was very easy to add value to a portfolio by buying a broad-based fund like EEM. As the theme has matured, success in the space has required more analysis and more specialized exposure.
In looking at many emerging market countries, the populations are often relatively young, eager to work and they aspire to their perception of an American lifestyle. Increasing disposable income has, in recent years, focused attention on the emerging market consumer as the engine of growth and investment opportunity.
The first ETF provider to realize this was Emerging Global Advisors, which has had tremendous success raising $1.2 billion for its EG Shares Emerging Market Consumer ETF (ECON). It has had less success with the EG Shares India Consumer ETF (INCO), but does have other consumer funds in the pipeline. The Global X China Consumer ETF (CHIQ) has a very respectable $170 million as well.
After having the emerging market consumer space mostly to itself, Emerging Global now faces serious competition from the new WisdomTree Emerging Market Consumer Growth Fund (EMCG).
EMCG takes a different approach to constructing the fund. Where ECON and the others target stocks more narrowly from the consumer staples and consumer discretionary sectors, EMCG takes a broader approach. Staples and discretionary combine to make up 53% of the new fund, but it also has 18% in financial stocks and 11% in telecom. The idea, of course, is that consumers will need more financial services and telecom services, which ties into the perceptions of an American lifestyle.