OneAscent Emerging Markets ETF (OAEM)

The OneAscent Emerging Markets ETF (ticker OAEM) tracks a broad index of publicly traded stocks from fast-growing developing economies across Asia, Latin America, Eastern Europe, and the Middle East. It offers individual investors a single, low-cost way to own a diversified slice of the world’s faster-growing markets without buying stocks in each country separately.

An emerging market is any country with a rapidly expanding economy but where stock markets and financial institutions are still developing — not yet the scale or sophistication of the United States, Europe, or Japan, but no longer in the category of frontier markets. India, China, Brazil, Mexico, Indonesia, and the ASEAN economies are the heavyweights; taken together, they hold more than a third of the world’s population and are growing faster than developed countries.

The appeal is straightforward: economic growth translates into rising corporate profits, and rising profits tend to lift stock prices over time. A company selling smartphones to India’s growing middle class, cement to Brazilian infrastructure builders, or semiconductors to Southeast Asian manufacturers rides a tailwind that mature-market companies simply do not enjoy. Over the past two decades emerging markets have generated compelling returns, though not in a straight line — they are far more volatile than U.S. or developed-world stocks.

Why OAEM matters

Individual investors face a practical problem: buying individual stocks in, say, the Shanghai or Mumbai exchanges requires opening foreign brokerage accounts, converting currency, and staying on top of regulatory filings in a different language and accounting system. An ETF like OAEM eliminates all that friction. You buy one share through any U.S. broker, and you own a diversified slice of thousands of companies across dozens of developing economies. The fund handles currency conversion, dividend reinvestment, and corporate-action processing behind the scenes.

The fund’s holdings rotate and reweight constantly to track its index. A typical emerging-markets index is market-capitalization weighted, meaning the largest companies — often Chinese tech giants, Indian financials, and Brazilian energy companies — carry the most influence. This is neither good nor bad, just structural: in any index, the biggest constituents drive the largest share of returns and volatility.

Currency and volatility

Owning foreign stocks means exposure to currency fluctuation. When the U.S. dollar strengthens, foreign-denominated returns are worth less in dollar terms, and vice versa. OAEM does not hedge this currency risk, so a strengthening dollar can erase months of stock-price gains, and a weakening dollar can amplify them. For long-term investors, this volatility is part of the bargain; over decades, currency moves tend to offset, leaving stock-price returns as the main driver.

Emerging markets are also structurally more volatile than developed markets. Political instability, currency crises, commodity price swings (many emerging economies export raw materials), and abrupt changes in government policy can all whipsaw share prices. A sharp global recession or a sharp rise in U.S. interest rates can trigger capital outflows and falling stock prices in developing countries, sometimes dramatically. This is why emerging-market ETFs are typically held by investors with a longer time horizon and higher tolerance for drawdowns.

How to evaluate OAEM

Start with the fund’s fact sheet, which lists the index it tracks, the top 10 holdings, and the sector breakdown. Compare the expense ratio against other emerging-market ETFs — the gap between a 0.20% fee and a 0.40% fee is small but compounds. Check liquidity: OAEM should trade with tight bid-ask spreads and reasonable daily volume.

Watch the fund’s geographic concentration: if China is 30% of the index and you are uneasy about Chinese political risk, you should know that before buying. Sector exposure also matters — if emerging markets are heavily weighted toward energy or financials and you believe those sectors will underperform, the fund’s returns will suffer accordingly.

For a benchmark comparison, observe the fund’s performance relative to a standard emerging-markets index over rolling periods of 3, 5, and 10 years. After accounting for fees, OAEM’s returns should track the index closely; if tracking error is large, something is amiss. Also note that emerging markets perform best when the U.S. economy is growing steadily and the dollar is stable or weakening; watch leading economic indicators and Fed policy for context.