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Seeking safety as emerging markets sink

Big Data Download

Money has been pouring out of emerging markets as investors continue to worry about slower growth in countries such as Brazil and China and the end of the U.S. Federal Reserve's monetary stimulus program.

Outflows remain high at $2.5 billion, but are below previous outflows of $6.5 billion, according to Clifford Davis, head of institutional equity derivative sales at BNP Paribas.

If you're looking to put your money to work somewhere with less risk, Davis points out that U.S. indexes get the least amount of their revenues from emerging markets.  The Russell 2000, S&P 500 and the Nasdaq 100 get just 15 to 20 percent of revenues from emerging markets.

On the other hand, Hong Kong’s Hang Seng,  Brazil’s Bovespa and Korea’s Kospi indexes get about 90 percent of total revenues from emerging markets.

Davis said for those who  still want exposure to emerging markets, the easiest way would be through an exchange-traded fund called EEM.  Top equity holdings in EEM include Samsung Electronics, Taiwan Semiconductor, Tencent Holdings and China Mobile.  Shares of EEM are down about 3.7 percent year-to-date.

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