Emerging Markets ETFs Continue Gaining Cash

ETF Trends

Despite elevated tensions in Eastern Europe, investors continued allocating capital to emerging markets exchange traded funds last week.

Equity-based emerging markets funds tracked by EPFR Global “posted inflows for the fourth week in a row – their longest such run since mid-2Q13 — during the week ending April 23 as commitments to Latin America and Global Emerging Markets equity funds offset outflows from Asia ex-Japan and EMEA equity funds,” according to the data provider.

Speaking of Latin America, the iShares MSCI Brazil Capped ETF (EWZ) raked in nearly $318 million for the week ending April 25, reversing a trend of outflows seen as the largest single-country ETF tracking a Latin American nation has surged for over a month. [Brazil ETF Finally Sees Inflows]

Amid heightened tensions in Ukraine and following a credit rating downgrade, investors pulled money from Russia ETFs “and funds dedicated to Turkey – which has strong trade and business links with Russia — extended their longest outflow streak of the year-to-date,” according to EPFR Global.

Last Friday, the Market Vectors Russia ETF (RSX) fell to its lowest level in five weeks after Standard & Poor’s lowered its rating on Russian sovereign debt to BBB-, the lowest investment grade. RSX, the largest Russia ETF, and the iShares MSCI Turkey ETF (TUR) shed over $18 million in combined assets last week. [Credit Downgrade Weighs on Russia ETFs]

The iShares MSCI Emerging Markets ETF (EEM) , the second-largest emerging markets ETF by assets, gained $37.5 million in new capital last week while the iShares Core MSCI Emerging Markets ETF (IEMG) brought in almost $20 million.

While some emerging markets ETFs are still on the 2014 outflows list, IEMG has been a pleasant surprise with year-to-date inflows of $486.5 million. [Cash Returns to EM ETFs]

Other emerging markets ETFs that saw inflows last week include the PowerShares DWA Emerging Markets Momentum Portfolio (PIE) and the PowerShares Emerging Markets Sovereign Debt Portfolio (PCY) . Those ETFs have taken in a combined $5.5 million over the past week, according to PowerShares data.

iShares Core MSCI Emerging Markets ETF

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ETF Trends editorial team contributed to this article. Tom Lydon’s clients own shares of IEMG.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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