The share prices of many well-known emerging markets ETFs are not the only things about those funds that are in decline. So are assets under management totals. Since the start of May, the Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) and the iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM) have shed a combined $6.5 billion in assets under management.
Single-country ETFs have not been immune to the outflows, either. Since May 1, the iShares FTSE China 25 Index Fund (NYSEArca: FXI) and the iShares MSCI Brazil Index Fund (NYSEArca: EWZ) have lost nearly $1 billion combined, according to Index Universe data.
There are a few emerging markets funds that are bucking the outflows trend and at least a pair are plays on a popular theme: Low volatility ETFs. Due to their tilt toward conservative picks, low volatility stocks will underperform during short-term bull rallies, but “low vol” might be just what the doctor ordered when it comes to emerging markets ETFs. [Low Volatility ETFs Remain Popular]
While investors have ditched traditional, diversified emerging markets ETFs in droves, that has been far from the case with low volatility ETFs. The iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSEArca: EEMV) has been something of a shining star among multi-country emerging markets ETFs in recent weeks. EEMV has performed slightly better than EEM since May 1 while hauling in $460.2 million in new assets over that time. [Low Volatility ETFs for Emerging Markets]
Next page: Another low-volatility ETF for emerging markets
The PowerShares S&P Emerging Markets Low Volatility Portfolio (NYSEArca: EELV) has been even better on the performance front with a 5.8% loss since May 1, although EELV has lagged in terms of asset-gathering. Still, almost $23 million in new assets over the past six weeks is pretty good for any emerging markets ETF.
Both ETFs are helped by relatively allocations to the BRIC nations, Brazil and China combine for less than 11% of EELV’s weight. EELV and EEMV have also been helped by their allocations to Taiwan. EELV devotes 17.3 percent to Taiwan, one of the lower beta emerging markets, while EEMV features a 16.8% weight to that country.
It is worth noting that over the past six weeks, the iShares MSCI Taiwan Index Fund (NYSEArca: EWT) is down just 2.8% and has brought in almost $68.5 million in new assets, according to Index Universe.
iShares MSCI Emerging Markets Minimum Volatility Index Fund
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM.