Vanguard MSCI Emerging Markets (NYSEArca: VWO) has experienced the most redemptions for any ETF the past month with nearly $900 million leaving the fund.
Earlier this year, Vanguard said it plans to drop the fund’s MSCI index and switch to a benchmark managed by FTSE. It’s unclear whether the recent outflows are related to the index switch, or other factors such as investor rotation away from developing markets or year-end tax swaps.
Since the end of October, investors have pulled $886 million from VWO, according to IndexUniverse ETF flow data.
Meanwhile, the iShares MSCI Emerging Markets (NYSEArca: EEM) managed by BlackRock (NYSE: BLK) is the best-selling ETF with inflows of nearly $2.8 billion.
Some fund managers benchmarked to MSCI indices have expressed reservations about the Vanguard index swap, according to a recent Financial Times report. Others are concerned the move may lead to negative tax consequences and costs.