Emerging Market ETFs Slide In August

Hung Tran
September 4, 2013


Emerging market exchange-traded funds took it on the chin in August, weighed down by China’s slowdown and concerns about the end of the Fed’s easy-money policies, while precious metals funds did quite well, helped in part by geopolitical tensions in the Middle East.  

ETFs focused on India and Indonesia bore the brunt of the losses, with declines or more than 19.59 percent in the case of the Market Vectors Small Cap India ETF (IDXJ | F-36) and 13.14 percent for the iShares MSCI Turkey ETF (TUR | B-100).

“India and Indonesia are dealing with crumbling currencies, inflation, capital flight, dwindling reserves and unsustainable current-account deficits,” according to IndexUniverse analyst Dennis Hudachek, in his latest blog . “Meanwhile, Turkey is dealing with political instability on top of a few of these same issues plaguing India and Indonesia.”

Hudachek suggested in a recent blog that investors ought to rethink their exposures to emerging markets, saying that they might consider diversifying away from broad funds such as the Vanguard FTSE Emerging Markets ETF (VWO | B-85 ). Last month, VWO suffered outflows of $1.18 billion, another clear sign of the headwinds emerging markets now face.

On the flip side, precious metals ETFs, specifically silver ETFs, experienced the best of times last month, led by the PowerShares DB Silver Fund (DBS | B-40), which gained 23.63 percent. The iShares Silver Trust (SLV | A-99) and the ETFS Physical Silver ETF (SIVR | A-100) rounded out the top-three top performers, both with gains of almost 21 percent last month.

P recious metals have risen in recent weeks amid mounting tension in the Middle East. Syria’s lead Bashar Assad is said to have used poisonous gas on Syrian citizens, the latest twist in a civil war now more than two years old. President Barack Obama is now formulating plans for a military strike on the Syrian regime, which has led investors into safe havens such as gold and silver.

“Spot prices for the metals surged in the month, rebounding sharply from multiyear lows of $1,180 and $18 for gold and silver, respectively,” said Sumit Roy, a commodities analyst and the managing editor of HardAssetInvestor.com.

“Traders are turning their attention from the potential end of the Fed's quantitative easing—a bearish factor—to the war in Syria and the coming "debt ceiling" battle in the U.S.—both bullish factors.”


Top Performers
Ticker Name Issuer August TRR
DBS PowerShares DB Silver Invesco PowerShares 23.63
SLV iShares Silver Trust BlackRock 20.89
SIVR ETFS Physical Silver ETF Securities 20.88
GDXJ Market Vectors Junior Gold Miners Van Eck 19.17
SILJ PureFunds ISE Junior Silver (Small Cap Miners/Explorers) Factor Advisor 18.68
SIL Global X Silver Miners Global X 18.38
GLDX Global X Gold Explorers Global X 15.28
VIIX VelocityShares VIX Short Term ETN VelocityShares 13.20
WITE ETFS Physical WM Basket ETF Securities 12.84
SLVP iShares MSCI Global Silver Miners BlackRock 12.77

Bottom Performers
Ticker Name Issuer August TRR
IDXJ Market Vectors Indonesia Small Cap Van Eck -19.59
EIDO iShares MSCI Indonesia BlackRock -18.08
IDX Market Vectors Indonesia Van Eck -16.22
INDY iShares India 50 BlackRock -14.69
INCO EGShares India Consumer Emerging Global Shares -14.35
EPHE iShares MSCI Philippines BlackRock -14.32
SCIN EGShares India Small Cap Emerging Global Shares -14.17
INP iPath MSCI India ETN Barclays Capital -13.93
SMIN iShares MSCI India Small-Cap BlackRock -13.16
TUR iShares MSCI Turkey BlackRock -13.14

Permalink | © Copyright 2013 IndexUniverse LLC. All rights reserved