EM Central Bank Actions Yield Mixed Results

ETF Trends

A prominent theme tied to emerging markets in recent months has been a spate of central bank actions. Primarily, developing world central banks have been raising interest rates as a means of defending sagging currencies.

Conventional wisdom dictates that it usually takes several months for an interest rate change, in either direction, to make an impact. However, price action throughout most of the emerging markets complex this year proves investors are less than impressed by the recent spate of developing world rate hikes. [Broken BIITS: Rate Hikes Not Boosting Confidence in EM ETFs]

That is not surprising as rate hikes mean higher borrowing costs, in turn exposing the vulnerabilities of emerging markets that borrowed heavily in foreign currencies. Still, some exchange traded funds tracking developing economies have benefited from recent rate action. Most, however, have not.

What follows is a list of emerging markets ETFs, the current benchmark borrowing rate in that country and the 2014 performance of each fund. All rate data is courtesy of CentralBankNews.com.

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