Broadly speaking, 2013 was a forgettable year for emerging markets investors. The Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) and the iShares MSCI Emerging Markets ETF (NYSEArca: EEM), the two largest emerging markets ETFs by assets, are down an average of 6.5%.

Painting a picture of just disenchanted investors are with emerging markets ETFs, five rank among the 10 worst ETFs for 2013 outflows. That list includes, VWO, EEM, the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ), the iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSEArca: EMB) and the iShares China Large-Cap ETF (NYSEArca: FXI). [EM Bond ETFs Look to a Better 2014]

Goldman Sachs cautioned investors not to set their hopes too high for developing world equities or bonds in 2014. In a report titled “Emerging Markets: As the Tide Goes Out,” Goldman advised that investors with a “moderate” tolerance for risk reduce their exposure by one-third, from 9 percent to 6 percent of overall portfolios, CNBC reported.

Goldman is particularly pessimistic on China, Brazil and Russia, three of the four BRIC nations, citing overinvolvement of governments in their economies, increasing reliance on commodities and unfavorable demographic trends, CNBC reported.

Stocks in China and Russia are among the least expensive in the developed world, but there is evidence that some professional investors have already taken the bait. A recent Bank of America-Merrill Lynch survey shows Russia and China, in that order, are the two most popular developing economies among the survey’s participants. [China ETFs Could Get Even Cheaper]

Despite the low valuations, ETFs tracking those countries have not done much over the past 90 days. FXI is down 1.8% over that time while the Market Vectors Russia ETF (NYSEArca: RSX) is lower by 1.6%.

EWZ has been by far the worst of the four major BRIC ETFs this year as it is saddled with a 2013 loss of almost 19%. Much of EWZ’s slack performance can be tied to the heavy-handed approach taken by the Brazilian and, to this point, futile efforts by the country’s central bank to deal with a  weak currency and slowing growth.  [Brazilian Real Shows Signs of Life]

Not surprisingly, Goldman was critical of the Brazilian government in its assessment of Latin America’s largest economy.  The bank said “the government’s large economic role is the most important reason for underperformance. That has created high interest rates, corporate strategy dictated by the government—often because of direct ownership—and high taxes,” according to CNBC.

Annual losses this year for EWZ, FXI and RSX will mark the second time in the past three years all three funds have finished the year in the red.

Market Vectors Russia ETF

Tom Lydon’s clients own shares of EEM and EMB.