Our dedicated emerging-market play — Columbia Emerging Markets Consumer ETF (ECON) — has recovered steadily after dropping sharply, along with the sector as a whole, in November following Trump’s election, notes Kuen Chan, contributing editor to The Complete Investor.

Investors had worried that Trump’s protectionist trade policies would hurt emerging economies. Another concern was that his agenda of infrastructure spending and tax cuts would fuel inflation and cause the Fed to raise rates more rapidly, thereby strengthening the dollar.

A strong dollar pulls foreign capital out of emerging economies and into the U.S.; it also makes it harder for overseas borrowers to service their dollar-denominated debt.

And with commodities largely priced in U.S. dollars, it tends to translate into cheaper commodities, shrinking the revenue emerging economies receive for their resources.

Those are legitimate concerns. Emerging economies are expected to incur their fourth consecutive year of net capital outflow in 2017.

A strong rise in the value of the dollar would increase the outflow pressure and make it increasingly hard to pay off dollar-denominated debt.

But while the market has focused on prospects for faster U.S. growth and a stronger dollar, the optimism may have gone too far. Protectionist trade policies could end up hurting the U.S. economy.

In any case, infrastructure spending here will be dwarfed by infrastructure creation in the East as China pursues its ambitious One Belt One Road initiative, which will require massive amounts of energy and materials and create trading networks fostering consumption growth in the East.

So a stronger dollar notwithstanding, we expect emerging economies will continue to propel global economic growth. Still, investors should keep a close eye on how U.S. trade policy shapes up and also on upcoming elections in Europe.

Signs that far right anti-globalization movements perform well enough to threaten the political structure of the E.U. and eurozone would hurt the global economy at large, including emerging economies.

ECON invests 43 percent of its assets in Asian emerging markets (nearly half of that in China). Around 54 percent of its funds are invested in consumer discretionary plays and 43 percent in consumer staples, so it’s nearly fully invest ed in consumer companies.

Consumption in developing markets is expected to reach $30 trillion by 2025, more than double its 2012 level. We maintain our suggested buy-up-to price of $23 in ECON.

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