Emerging markets exchange traded funds (ETFs) are on such shaky grounds lately that investors withdrew $627 million from them last week that ended Tuesday. The Investment Wires Staff for The Mutual Fund Wire reports $2 billion was withdrawn the previous week. The iShares MSCI Emerging Markets Index (EEM) is down 12%.
"It’s like a natural reflex for a lot of investors to pull out of emerging markets when there’s any whiff of a credit crunch," says Alta Vista research analyst Michael Krause in an article by Carl Gutierrez for Forbes. Whether the emerging markets will recover after the subprime mess has cleared remains to be seen. The Federal Reserve’s move today helped bring EEM up 3.6% today and back above its trend line.
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.