Emerging Markets ETFs Submerged in Risk-Off Trend

November 25th at 1:32pm by Tom Lydon

Emerging markets exchange traded funds have fallen harder than U.S. stocks in November’s downdraft on Eurozone debt anxiety. ETFs tracking developing markets live up to their reputation for volatility when markets see extreme moves.

Recent flow data suggest investors have piled into emerging market funds and ETFs.

“As the crisis in Europe threatens to drive developed economies into a double-dip recession, portfolio investors are beginning to understand that emerging markets offer a more favorable risk-reward profile,” said Matt Lasov, director of global research at Frontier Strategy Group, in a MarketWatch report earlier this month.

The iShares MSCI Emerging Markets (NYSEArca: EEM) is down 10% the past month, versus a 6% decline for SPDR S&P 500 ETF (NYSEArca: SPY).

Emerging market ETFs have been brisk sellers this year, while recent fund flow data points to investor appetite for Chinese and Brazilian stocks. [ETF Investors Position for Emerging Markets Rebound]

The iShares MSCI Emerging Markets holds more than $30 billion, while Vanguard Emerging Markets ETF (NYSEArca: VWO) has over $40 billion in its coffers. [Emerging Market ETFs Need to Take Leadership Role]

Other emerging market ETFs include:

  • SPDR S&P Emerging Markets (NYSEArca: GMM)
  • Schwab Emerging Markets (NYSEArca: SCHE)
  • SPDR S&P Emerging Markets Small-Cap (NYSEArca: EWX)
  • EGShares Emerging Markets Consumer (NYSEArca: ECON)

iShares MSCI Emerging Markets


Tisha Guerrero contributed to this article .

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.