In just a little over a month this year, asset outflows in emerging market exchange traded funds have already outpaced redemptions for all of 2013 as slow growth and currency concerns instigated a global sell-off.
The Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) and iShares MSCI Emerging Markets ETF (NYSEArca: EEM), the two largest emerging market ETFs, have experienced combined outflows of about $10.2 billion year-to-date, according to ETF.com. [Emerging Markets Outflows: Worse Before it Gets Better]
According to EPFR, for the week ended Feb. 5, emerging market equity funds lost $6.4 billion after a $6.3 billion outflow in the week prior, reports Robert Minto for Financial Times. [A January to Forget: ETFs Lose Almost $10 Billion]
Investors dumped about $18.6 billion in emerging market equities so far this year, compared to $15.3 billion in outflows for all of 2013.
“The outflows are not good news and from a macro perspective will have negative EM consequences by weighing on currencies, credit extension and ultimately the ability to consume,” analysts at Barclays told FT.