The pullback in emerging markets and the related iShares ETF, EEM, is not too surprising. EEM has been lagging the broad market SPDR S&P 500 (NYSEArca: SPY) since the beginning of 2013 . This suggests that investors were already scaling back on risk earlier in the year. SPY is up 5% this month while EEM has lost 3.3%. [Rising Interest in Riskier Emerging Market ETFs]
“Over the last 12 months, U.S. markets have rallied 10%. Emerging markets, on the other hand, have been down as much as 16% – and have barely fought back to breakeven,” Matthew Weinschenk wrote for Wall Street Daily.
iShares MSCI Emerging Markets Index
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own EEM.