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Some Emerging Markets ETFs Bucking Outflow Trend


The share prices of many well-known emerging markets ETFs are not the only things about those funds that are in decline. So are assets under management totals. Since the start of May, the Vanguard FTSE Emerging Markets ETF (VWO) and the iShares MSCI Emerging Markets Index Fund (EEM) have shed a combined $6.5 billion in assets under management.

Single-country ETFs have not been immune to the outflows, either. Since May 1, the iShares FTSE China 25 Index Fund (FXI) and the iShares MSCI Brazil Index Fund (EWZ) have lost nearly $1 billion combined, according to Index Universe data.

There are a few emerging markets funds that are bucking the outflows trend and at least a pair are plays on a popular theme: Low volatility ETFs. Due to their tilt toward conservative picks, low volatility stocks will underperform during short-term bull rallies, but “low vol” might be just what the doctor ordered when it comes to emerging markets ETFs. [Low Volatility ETFs Remain Popular]

While investors have ditched traditional, diversified emerging markets ETFs in droves, that has been far from the case with low volatility ETFs. The iShares MSCI Emerging Markets Minimum Volatility Index Fund (EEMV) has been something of a shining star among multi-country emerging markets ETFs in recent weeks. EEMV has performed slightly better than EEM since May 1 while hauling in $460.2 million in new assets over that time. [Low Volatility ETFs for Emerging Markets]

Next page: Another low-volatility ETF for emerging markets