Touchstone Sands Capital Emerging Markets ex-China Growth ETF (TEMX) seeks to provide long-term capital appreciation by investing in growth-oriented companies across emerging markets while specifically excluding Chinese securities. This actively managed ETF targets high-quality emerging market companies with strong earnings growth potential, innovative business models, and sustainable competitive advantages.
How It Works
TEMX employs an active management approach using Sands Capital's fundamental research methodology to identify emerging market growth companies outside of China. The fund focuses on businesses with above-average revenue and earnings growth rates, strong management teams, and expanding market opportunities. Portfolio construction emphasizes concentrated holdings of 30-50 companies across various emerging market countries including India, Taiwan, South Korea, and Brazil, with quarterly rebalancing based on fundamental analysis rather than market capitalization weighting.
Key Features
- Actively excludes China exposure, providing pure-play access to non-Chinese emerging markets growth opportunities during geopolitical tensions
- Managed by Sands Capital with 30+ years of emerging markets expertise and proven track record in growth investing
- Recently launched fund with 0.00% expense ratio during promotional period, though permanent fee structure not yet disclosed
Risks
- This ETF can lose significant value during emerging markets selloffs, potentially declining 40-60% during global risk-off periods or currency crises
- Active management risk means the fund may underperform passive emerging markets benchmarks if stock selection proves unsuccessful over time
- Geographic concentration outside China creates exposure to country-specific political instability, regulatory changes, and currency devaluations in remaining emerging markets
Who Should Own This
Best suited for aggressive growth investors with 7+ year time horizons seeking emerging markets exposure without China risk. High risk tolerance required due to emerging markets volatility and active management uncertainty. Appropriate as 5-15% satellite allocation for investors wanting to diversify away from China-heavy emerging markets benchmarks while maintaining growth focus.