November 20, 2025 • 13 mins
In this episode of Lead Lag Live, I sit down with Brendan Ahern, Chief Investment Officer at KraneShares, to break down the renewed momentum behind emerging markets and the forces driving performance across global tech and e commerce.
From valuation gaps and dollar depreciation to sector leadership shifts, Ahern shares how EM growth factors and specifically the KEMQ ETF are positioned to benefit from a structural rebalancing away from overstretched US valuations.
In this episode:
– Why emerging markets are regaining leadership after a decade of underperformance
– How tech and e commerce have reshaped the EM index composition
– The valuation divergence between US tech and EM tech
– Why ADR volatility distorts fundamentals and why local shares matter
– How investors should size EM exposure and position KEMQ in a portfolio
Lead Lag Live brings you inside conversations with the financial thinkers who shape markets. Subscribe for interviews that go deeper than the noise.
#LeadLagLive #EmergingMarkets #KraneShares #GlobalTech #KEMQ
Start your adventure with TableTalk Friday: A D&D Podcast at the link below or wherever you get your podcasts!
Youtube: https://youtube.com/playlist?list=PLgB6B-mAeWlPM9KzGJ2O4cU0-m5lO0lkr&si=W_-jLsiREjyAIgEs
Spotify: https://open.spotify.com/show/75YJ921WGQqUtwxRT71UQB?si=4R6kaAYOTtO2V
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_01 (00:36):
That's where people have gotten themselves in
trouble is you get a kind of grgood news like we're seeing with
some of their earnings, you getthis proverbial green light, and
then you get a pullback, but butyou made it such a big position
that you're almost forced out ofthat position.
That's why I talk about, youknow, only own as much as you're
able to be able to buy on a dip.
(00:57):
And I think that's a really akey element in success and
investing, that not just aroundemerging markets, but just in
general.
SPEAKER_00 (01:15):
I'm your host, Melanie Schaefer.
Welcome to Lead Leg Live.
Now, emerging markets arestaging a real comeback this
year, led by strength intechnology and e-commerce.
After lagging U.S.
stocks for much of the pastdecade, markets like China,
Brazil, and even India are nowshowing renewed momentum,
supported by better earnings,easing inflation, and a shift in
(01:38):
global capital flows.
According to Bloomberg, the MSCIEmerging Markets Index is on
track for one of its strongestyears since 2017, thanks in a
large part to a rebound inconsumer tech and digital retail
sectors.
My guest today is Brendan Ahern,Chief Investment Officer at
Crane Shares and one of theleading experts on China and
(02:00):
emerging markets investing.
Today we're talking about theCrane Shares Emerging Markets
Consumer Technology ETF, ticker,KEMQ, and what's driving
opportunity in this space.
Brandon, welcome back.
SPEAKER_01 (02:15):
Thank you for the opportunity, Melanie.
SPEAKER_00 (02:17):
So let's start with the big picture.
International and emergingmarket equities are finally
showing signs of leadershipagain.
What do you see as the maindrivers behind this rally and
what makes you confident it cancontinue into 2026?
SPEAKER_01 (02:30):
I think there's a whole host of issues.
You know, one of them is justthe incredible outperformance of
U.S.
equities over the last really 16years since the GFC low.
We've seen a vast outperformanceof U.S.
equities versus non-U.S.
equities, including emergingmarkets.
But I think part of what'sdriving this rebalancing is very
(02:51):
high valuations in the U.S., aswell as currency deappreciation
of the dollar and some of theconcerns around just some of the
political dysfunction, the levelof debt of the U.S.
government today.
So I think we're seeing a littlebit of a rebalancing effect.
And a lot of that, an element ofthat money is going to seek out
growth opportunities in emergingmarkets, which is really what
(03:14):
KEMQ is built for.
It's really this growth factorfor emerging markets.
SPEAKER_00 (03:18):
Yeah.
And so, Brendan, you've beenhighlighting global tech and
e-commerce as standout sectorswithin emerging markets for a
while.
Is it more of a short-termrebound?
Or are we looking at structuredshift where growth is coming
back globally and for a while?
SPEAKER_01 (03:32):
Well, I think one is part of what's been made non-US
equity such a poor asset classis really the composition of the
indices.
That if we looked at somethinglike MSCI emerging markets, uh
50% of the benchmark was infinancials and energy 10 years
ago.
(03:53):
And if you include industrials,materials, and real estate, it
was really a value factor duringa period where uh the market and
investors favored growthequities and technology within
MSCI emerging markets was only10% of the index.
So I think part of what'sdriving this is that investors
recognize that there are globalleaders, uh, companies not just
(04:17):
in China, but in South Korea, inTaiwan, in South America, that
are really geared.
These are really tech companies.
And those companies are actuallyperforming really well.
And if you remove some of thesevalue sectors, uh, banks,
financials, insurance, energy,if you remove those companies
(04:38):
from the definition of emergingmarkets, lo and behold, you can
get some really strong returns,as we've seen in KEMQ.
Really one of the topperformers, if not the top
performing across both activeand passive EM strategies.
SPEAKER_00 (04:53):
Yeah, and I want to just pivot now and talk a little
bit about politics.
I mean, today uh Epstein and thenew uh documents that have come
out are dominating theheadlines, but in general,
geopolitical tensions and tradeheadlines still dominate much of
the conversation, usually.
Yet we've seen companies likeAlibaba and PDD holdays
outperform the S ⁇ P 500 despitethose risks.
(05:15):
Do you think the larger geopgeopolitical concerns are still
overly priced in to uh thesemarkets?
SPEAKER_01 (05:22):
Yeah, I think I think that's an issue if you're
out buying the US ADRs of a lotof these companies, particularly
on the China side.
But but in general, yeah, thesecompanies, in when they're
listed solely here in the US,they're gonna have a high degree
of volatility.
They're not gonna trade onfundamentals, they're gonna
trade on tweets and the newsfeed.
(05:43):
And that's why we've reallymigrated our strategies to
holding the local shares when wecan, when that local shares has
ample liquidity, just becauseyou just see on a daily basis
where this kind of medianarrative is so negative.
Um, and I think it really weighson the ADRs.
(06:04):
And that's why in the case of,say, Alibaba, we don't we don't
hold the ADR, we hold 9988 anduh in Hong Kong because
investors in in Asia, when theyget that same news, they they
recognize with what it is.
It's just clickbait.
And and so you know, if you holdBABA US, you know, I wish you
good luck because it's gonna beabsolutely absurdly volatile
(06:29):
because of this media narrativemakes it really volatile.
And yeah, I think that's part ofthe benefit of an ETF is we're
we're gonna do something for youthat's gonna be really hard to
do, which is hold a Hong Kong,South Korea, Taiwanese stock
locally.
SPEAKER_00 (06:45):
Can you talk a little bit about the earnings
that you've seen uh starting tocome out and and particularly
some of the companies that arelagging what we've seen in the
reports?
SPEAKER_01 (06:55):
Yeah, I think I think we're kind of coming into
Q3 earnings season.
And you know, some of the Chinauh companies, uh some of the
China tech leaders, um, verystrong results from Tencent, JD,
Billy Billy.
Uh, you know, Tencent, one ofthe largest companies in
emerging markets, was able togrow revenue 15% year over year.
(07:18):
They did almost 27 billion ofrevenue for the quarter.
So I think Tencent is kind of agood example of a really a tech
leader just listed outside ofthe US.
The other difference is it'scheap, that that it's not at
all-time highs.
You know, the stock is actuallybelow its all-time high back in
2021.
(07:39):
So I think that's part of what'sleading a little bit of this
rebalancing effect is thisvaluation disparity between US
tech and if it's China tech orEM tech.
Um, these stocks have upsidepotential.
And I think that's that's alittle bit of a harder argument
for some of the US names basedon really the very high
(07:59):
valuations.
SPEAKER_00 (08:00):
And when if you're talking to advisors or to uh
investors about when a good timeis to enter, is now a good time,
or do you see a pullback cominguh following the earnings
reports?
SPEAKER_01 (08:10):
Yeah, I mean, in general, I think market timing
is is is very difficult.
Um, you know, in my own personalaccount, I've probably proven
I've not done it very well.
Um I think ultimately, you know,you know, emerging market growth
investing um is an assetallocation decision.
And and I think that's a youknow, it's a permanent part of
(08:31):
an asset allocation.
And you know, it's got to bevolatility adjusted.
So, you know, certainly withinyou know a you know, a broad
asset allocation, EM might bebetween five and 10% in a
portfolio based on one's uh riskprofile.
So, so so within that, withinthat, you know, we're probably
representing half of thatposition.
(08:53):
So I think I think the key isyou don't want to own so much
that if there's a pullback,you're not willing to add to the
position.
I think that's where people havegotten themselves in trouble, is
you get a kind of a good news,like we're seeing with some of
their earnings, you get thisproverbial green light, and then
you get a pullback, but but youmade it such a big position that
(09:14):
you're almost forced out of thatposition.
That's why I talk about, youknow, only own as much as you're
able to be able to buy on a dip.
And I think that's a really akey element to in you know
success in investing, not justaround emerging markets, but
just in general.
SPEAKER_00 (09:31):
Yeah, so I that's what I want to get into more
about um investors who arelooking at their portfolio as a
whole.
How much, or I think you saidabout five percentage of KEMQ,
but in terms of emergingmarkets, how should investors be
looking to diversify beyond justUS exposure?
And can you talk a little bit ofa little bit more about some of
your other ETFs?
SPEAKER_01 (09:51):
Yeah, I mean, listen, broad, broadly speaking,
you know, the US equities aretwo-thirds of the all-country
world index.
So, so so you have, you know,you're always going to have a
healthy exposure to U.S.
equities.
And certainly a lot of USmultinationals have a lot of
foreign revenue.
I think, I think what we'reseeing is what's driving a
(10:13):
little bit of the rebalancingeffect is just doing the simple
valuation comparison, right?
And you know, it's it's it'salmost become a joke where you
know some of these individual UStech names you could buy every
company in emerging markets.
I mean, that's that, you know,they don't necessarily ring a
bell at the top, but I thinkthere are some signals, some
(10:35):
potential signposts, or at leasta little bit of a yellow
caution.
So again, you know, you know,most in most portfolios, you're
gonna have five to 10% emergingmarkets, and we think that KMQ
is should be at least half ofthat, probably barbelled with a
good value EM strategy.
And you can kind of rebalanceacross those two.
But yeah, we are constructive onthe space just because we we
(10:57):
certainly see a lot of demandfrom non-U.S.
investors uh for the you knowwhat we're doing with KEMQ uh
just based on some of the dollardepreciation taking taking place
outside of the US.
SPEAKER_00 (11:09):
And finally, Brandon, for anyone watching who
wants to learn more about KEMQor your research at Crane
Shares, where's the best placefor them to go?
SPEAKER_01 (11:18):
Yeah, certainly craneshares.com and uh
craneshares.com backslash KEMQ.
Uh but certainly uh we're alwaysavailable at infocrane
shares.com, you know, like likeyourselves, uh, you know, uh
customer service is job one.
So we're always available andcertainly, yeah, we produce a
wealth of research.
We, you know, we endeavor toearn the trust of investors
(11:38):
through our data-driven,non-hyperbole driven research
efforts.
And I think that reallyexplains, you know, why we have
such a following in both theemerging market in China space
today.
SPEAKER_00 (11:51):
Yeah, absolutely, Brendan.
And it's great to have you backon the show.
And thanks to everyone else forwatching.
Be sure to like, share, andsubscribe for more episodes of
Feed Leg Live.
That's where people have gotten themselves in
trouble is you get a kind of grgood news like we're seeing with
some of their earnings, you getthis proverbial green light, and
then you get a pullback, but butyou made it such a big position
that you're almost forced out ofthat position.
That's why I talk about, youknow, only own as much as you're
able to be able to buy on a dip.
(00:57):
And I think that's a really akey element in success and
investing, that not just aroundemerging markets, but just in
general.
SPEAKER_00 (01:15):
I'm your host, Melanie Schaefer.
Welcome to Lead Leg Live.
Now, emerging markets arestaging a real comeback this
year, led by strength intechnology and e-commerce.
After lagging U.S.
stocks for much of the pastdecade, markets like China,
Brazil, and even India are nowshowing renewed momentum,
supported by better earnings,easing inflation, and a shift in
(01:38):
global capital flows.
According to Bloomberg, the MSCIEmerging Markets Index is on
track for one of its strongestyears since 2017, thanks in a
large part to a rebound inconsumer tech and digital retail
sectors.
My guest today is Brendan Ahern,Chief Investment Officer at
Crane Shares and one of theleading experts on China and
(02:00):
emerging markets investing.
Today we're talking about theCrane Shares Emerging Markets
Consumer Technology ETF, ticker,KEMQ, and what's driving
opportunity in this space.
Brandon, welcome back.
SPEAKER_01 (02:15):
Thank you for the opportunity, Melanie.
SPEAKER_00 (02:17):
So let's start with the big picture.
International and emergingmarket equities are finally
showing signs of leadershipagain.
What do you see as the maindrivers behind this rally and
what makes you confident it cancontinue into 2026?
SPEAKER_01 (02:30):
I think there's a whole host of issues.
You know, one of them is justthe incredible outperformance of
U.S.
equities over the last really 16years since the GFC low.
We've seen a vast outperformanceof U.S.
equities versus non-U.S.
equities, including emergingmarkets.
But I think part of what'sdriving this rebalancing is very
(02:51):
high valuations in the U.S., aswell as currency deappreciation
of the dollar and some of theconcerns around just some of the
political dysfunction, the levelof debt of the U.S.
government today.
So I think we're seeing a littlebit of a rebalancing effect.
And a lot of that, an element ofthat money is going to seek out
growth opportunities in emergingmarkets, which is really what
(03:14):
KEMQ is built for.
It's really this growth factorfor emerging markets.
SPEAKER_00 (03:18):
Yeah.
And so, Brendan, you've beenhighlighting global tech and
e-commerce as standout sectorswithin emerging markets for a
while.
Is it more of a short-termrebound?
Or are we looking at structuredshift where growth is coming
back globally and for a while?
SPEAKER_01 (03:32):
Well, I think one is part of what's been made non-US
equity such a poor asset classis really the composition of the
indices.
That if we looked at somethinglike MSCI emerging markets, uh
50% of the benchmark was infinancials and energy 10 years
ago.
(03:53):
And if you include industrials,materials, and real estate, it
was really a value factor duringa period where uh the market and
investors favored growthequities and technology within
MSCI emerging markets was only10% of the index.
So I think part of what'sdriving this is that investors
recognize that there are globalleaders, uh, companies not just
(04:17):
in China, but in South Korea, inTaiwan, in South America, that
are really geared.
These are really tech companies.
And those companies are actuallyperforming really well.
And if you remove some of thesevalue sectors, uh, banks,
financials, insurance, energy,if you remove those companies
(04:38):
from the definition of emergingmarkets, lo and behold, you can
get some really strong returns,as we've seen in KEMQ.
Really one of the topperformers, if not the top
performing across both activeand passive EM strategies.
SPEAKER_00 (04:53):
Yeah, and I want to just pivot now and talk a little
bit about politics.
I mean, today uh Epstein and thenew uh documents that have come
out are dominating theheadlines, but in general,
geopolitical tensions and tradeheadlines still dominate much of
the conversation, usually.
Yet we've seen companies likeAlibaba and PDD holdays
outperform the S ⁇ P 500 despitethose risks.
(05:15):
Do you think the larger geopgeopolitical concerns are still
overly priced in to uh thesemarkets?
SPEAKER_01 (05:22):
Yeah, I think I think that's an issue if you're
out buying the US ADRs of a lotof these companies, particularly
on the China side.
But but in general, yeah, thesecompanies, in when they're
listed solely here in the US,they're gonna have a high degree
of volatility.
They're not gonna trade onfundamentals, they're gonna
trade on tweets and the newsfeed.
(05:43):
And that's why we've reallymigrated our strategies to
holding the local shares when wecan, when that local shares has
ample liquidity, just becauseyou just see on a daily basis
where this kind of medianarrative is so negative.
Um, and I think it really weighson the ADRs.
(06:04):
And that's why in the case of,say, Alibaba, we don't we don't
hold the ADR, we hold 9988 anduh in Hong Kong because
investors in in Asia, when theyget that same news, they they
recognize with what it is.
It's just clickbait.
And and so you know, if you holdBABA US, you know, I wish you
good luck because it's gonna beabsolutely absurdly volatile
(06:29):
because of this media narrativemakes it really volatile.
And yeah, I think that's part ofthe benefit of an ETF is we're
we're gonna do something for youthat's gonna be really hard to
do, which is hold a Hong Kong,South Korea, Taiwanese stock
locally.
SPEAKER_00 (06:45):
Can you talk a little bit about the earnings
that you've seen uh starting tocome out and and particularly
some of the companies that arelagging what we've seen in the
reports?
SPEAKER_01 (06:55):
Yeah, I think I think we're kind of coming into
Q3 earnings season.
And you know, some of the Chinauh companies, uh some of the
China tech leaders, um, verystrong results from Tencent, JD,
Billy Billy.
Uh, you know, Tencent, one ofthe largest companies in
emerging markets, was able togrow revenue 15% year over year.
(07:18):
They did almost 27 billion ofrevenue for the quarter.
So I think Tencent is kind of agood example of a really a tech
leader just listed outside ofthe US.
The other difference is it'scheap, that that it's not at
all-time highs.
You know, the stock is actuallybelow its all-time high back in
2021.
(07:39):
So I think that's part of what'sleading a little bit of this
rebalancing effect is thisvaluation disparity between US
tech and if it's China tech orEM tech.
Um, these stocks have upsidepotential.
And I think that's that's alittle bit of a harder argument
for some of the US names basedon really the very high
(07:59):
valuations.
SPEAKER_00 (08:00):
And when if you're talking to advisors or to uh
investors about when a good timeis to enter, is now a good time,
or do you see a pullback cominguh following the earnings
reports?
SPEAKER_01 (08:10):
Yeah, I mean, in general, I think market timing
is is is very difficult.
Um, you know, in my own personalaccount, I've probably proven
I've not done it very well.
Um I think ultimately, you know,you know, emerging market growth
investing um is an assetallocation decision.
And and I think that's a youknow, it's a permanent part of
(08:31):
an asset allocation.
And you know, it's got to bevolatility adjusted.
So, you know, certainly withinyou know a you know, a broad
asset allocation, EM might bebetween five and 10% in a
portfolio based on one's uh riskprofile.
So, so so within that, withinthat, you know, we're probably
representing half of thatposition.
(08:53):
So I think I think the key isyou don't want to own so much
that if there's a pullback,you're not willing to add to the
position.
I think that's where people havegotten themselves in trouble, is
you get a kind of a good news,like we're seeing with some of
their earnings, you get thisproverbial green light, and then
you get a pullback, but but youmade it such a big position that
(09:14):
you're almost forced out of thatposition.
That's why I talk about, youknow, only own as much as you're
able to be able to buy on a dip.
And I think that's a really akey element to in you know
success in investing, not justaround emerging markets, but
just in general.
SPEAKER_00 (09:31):
Yeah, so I that's what I want to get into more
about um investors who arelooking at their portfolio as a
whole.
How much, or I think you saidabout five percentage of KEMQ,
but in terms of emergingmarkets, how should investors be
looking to diversify beyond justUS exposure?
And can you talk a little bit ofa little bit more about some of
your other ETFs?
SPEAKER_01 (09:51):
Yeah, I mean, listen, broad, broadly speaking,
you know, the US equities aretwo-thirds of the all-country
world index.
So, so so you have, you know,you're always going to have a
healthy exposure to U.S.
equities.
And certainly a lot of USmultinationals have a lot of
foreign revenue.
I think, I think what we'reseeing is what's driving a
(10:13):
little bit of the rebalancingeffect is just doing the simple
valuation comparison, right?
And you know, it's it's it'salmost become a joke where you
know some of these individual UStech names you could buy every
company in emerging markets.
I mean, that's that, you know,they don't necessarily ring a
bell at the top, but I thinkthere are some signals, some
(10:35):
potential signposts, or at leasta little bit of a yellow
caution.
So again, you know, you know,most in most portfolios, you're
gonna have five to 10% emergingmarkets, and we think that KMQ
is should be at least half ofthat, probably barbelled with a
good value EM strategy.
And you can kind of rebalanceacross those two.
But yeah, we are constructive onthe space just because we we
(10:57):
certainly see a lot of demandfrom non-U.S.
investors uh for the you knowwhat we're doing with KEMQ uh
just based on some of the dollardepreciation taking taking place
outside of the US.
SPEAKER_00 (11:09):
And finally, Brandon, for anyone watching who
wants to learn more about KEMQor your research at Crane
Shares, where's the best placefor them to go?
SPEAKER_01 (11:18):
Yeah, certainly craneshares.com and uh
craneshares.com backslash KEMQ.
Uh but certainly uh we're alwaysavailable at infocrane
shares.com, you know, like likeyourselves, uh, you know, uh
customer service is job one.
So we're always available andcertainly, yeah, we produce a
wealth of research.
We, you know, we endeavor toearn the trust of investors
(11:38):
through our data-driven,non-hyperbole driven research
efforts.
And I think that reallyexplains, you know, why we have
such a following in both theemerging market in China space
today.
SPEAKER_00 (11:51):
Yeah, absolutely, Brendan.
And it's great to have you backon the show.
And thanks to everyone else forwatching.
Be sure to like, share, andsubscribe for more episodes of
Feed Leg Live.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Are You A Charlotte?
In 1997, actress Kristin Davis’ life was forever changed when she took on the role of Charlotte York in Sex and the City. As we watched Carrie, Samantha, Miranda and Charlotte navigate relationships in NYC, the show helped push once unacceptable conversation topics out of the shadows and altered the narrative around women and sex. We all saw ourselves in them as they searched for fulfillment in life, sex and friendships. Now, Kristin Davis wants to connect with you, the fans, and share untold stories and all the behind the scenes. Together, with Kristin and special guests, what will begin with Sex and the City will evolve into talks about themes that are still so relevant today. "Are you a Charlotte?" is much more than just rewatching this beloved show, it brings the past and the present together as we talk with heart, humor and of course some optimism.