Investors are pulling more money out of the emerging markets and related exchange traded funds as traders turn risk adverse in light of U.S. rate concerns and monitor growing problems in Russia and China.
According to EPFR data, investors have been fleeing emerging market equity funds over the past two weeks, reports Juliet Samuel for the Wall Street Journal.
For instance, the iShares MSCI Emerging Markets ETF (NYSEArca: EEM) experienced $1.8 billion in outflows since September 11, according to ETF.com data.
However, some of that money may have found its way back into cheaper emerging market ETF options. For instance, the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), which has a 0.15% expense ratio, saw $445.8 million in inflows over the same period while the iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG), which has a 0.18% expense ratio, attracted $459.6 million. EEM has a 0.67% expense ratio. [EM ETF Outflows Not Yet a Cause for Panic]
Russ Koesterich, BlackRock’s global chief investment strategist, contributes the outflows from emerging market funds to “concerns over increasingly erratic Russian policy, slower Chinese growth and higher U.S. rates.”
Nevertheless, the Russia stock ETF has been attracting some bottom fishers trying to tap into a cheap market. [Another Return to Russia ETFs]