European investors now have the opportunity to invest in the booming global pet industry and the emerging market internet revolution. Launching today are Europe’s first pet care ETF – the Rize Pet Care UCITS ETF – investing in companies that are benefiting from the rise in the ownership and humanisation of pets – and the Rize Emerging Market Internet and Ecommerce UCITS ETF – a new EM-focused thematic ETF that provides exposure to the EM digital consumer market while capping individual country exposure.
To do so, the Emerging Market ETF ensures that exposure to any one single emerging market never exceeds 25% at the index rebalances. Both ETFs are listing today on the London Stock Exchange (LSE) and the Frankfurt Stock Exchange (Xetra).
Covid and Millennials are driving a pet spending boom
Much was made of the explosion in pet ownership during the Covid-19 lockdowns. While the pandemic certainly accelerated pet ownership, household formation among Millennials and Gen Z is likely to sustain it. Pet ownership is expected to rise by +14% over the next 10 years. According to a survey conducted by AlphaWise (Morgan Stanley) in the middle of last year, 65% of 18- to 34-year-olds were planning on acquiring (or adding) a pet over the next 5 years.
What’s more, pet owners – especially younger ones – were found to be spending persistently more on their pets than previous generations. According to further research published by Morgan Stanley, the trajectory of household spending per pet looks favourable and is expected to grow from $980 in 2020 to $1,292 by 2025 – and then expand by another $600 to $1,909 by 2030. This presents an optimistic outlook for the pet sector.
The digital megatrend in emerging markets
The digital revolution has not been limited to the developed world. Today’s emerging markets have their own, burgeoning online economies. Rising disposable incomes, urbanisation, positive reform momentum, strong demographics and the widespread adoption of digital devices form the backbones of this new megatrend.
Most of us are already familiar with the digital giants of the emerging world from Baidu (China’s answer to Google) to MercadoLibre (Argentina’s answer to Amazon) and MakeMyTrip (India’s answer to TripAdvisor). Yet, these companies are only scratching the surface of the outsized opportunity.
Today, emerging markets comprise more than half of the world’s population, many of whom are working age. And these people are driving increasing digital consumption and demanding better services due to greater awareness, social connectivity, mobility and concerns for sustainability. The outlook for digital demand, therefore, has never looked better across emerging markets.
“The emerging world contains 22 of the world’s 37 megacities,” said Stuart Forbes, Co-founder of Rize ETF. “More than half of the world’s population lives in emerging markets, including 86% of the world’s Millennials and 89% of the world’s Gen Z. In the years ahead, we are looking at two converging but mutually reinforcing megatrends: the internet as an incubator for technological innovation and ecommerce as a catalyst for behavioural change.”
Rize Pet Care UCITS ETF will trade on the listing lines PETZ (USD) and PAWZ (GBP) on the LSE and KATZ (EUR) on Xetra. Rize Emerging Market Internet and Ecommerce UCITS ETF will trade on the listing lines EMRJ (USD) and EMRP (GBP) on the LSE and ECOM (EUR) on Xetra. Both ETFs will also be listed on the Borsa Italiana and the SIX Swiss Exchange in due course, Rize ETF said.
