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