The global economy is bustling with an overseas economic growth spurt and exchange traded funds (ETFs) focused on foreign markets have made it easier to access this activity.  Emerging market funds are up almost 200% over the past five years.  When the credit crunch began to hit the U.S., investors turned to emerging markets, with the belief they were immune from U.S. problems.  Between the end of August and November 14, investors poured $30.5 billion into emerging market funds, reports Gail Marks Jarvis for The Chicago Tribune.

Recently investors seem a bit concerned with emerging markets, as China tries to slow down growth and there is fear that a recession in the U.S. will affect the rest of the world as U.S. consumers buy less.  For the week ended November 11, investors pulled $5.6 billion out of emerging market funds.

Some emerging market ETFs and their performance since their recent high, October 31:

  • iShares MSCI Emerging Markets Index (EEM) down 15.1%
  • PowerShares FTSE RAFI Emerging Markets (PXH) down 12.8%
  • SPDR S&P Emerging Markets ETF (GMM) down 13.7%
  • Vanguard Emerging Markets ETF (VWO) down 16.2%

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.