Amid violent protests in Hong Kong and with the major exchange traded funds tracking Brazilian and Russian stocks entering new bear markets last week, the broader emerging markets ETF complex was hit with redemptions again last week.
“Redemptions from ETFs that invest across developing nations as well as those that target specific countries totaled $1.27 billion, compared withs inflows of $60.1 million in the previous week,” report Ken Kohn and Minh Bui for Bloomberg.
The iShares MSCI Emerging Markets ETF (NYSEArca: EEM), the second-largest emerging markets ETF by assets, was particularly hard hit with outflows of over $1.5 billion. However, the rival Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO), the largest emerging markets ETF, did not lose any money last week while the iShares Core MSCI Emerging Markets ETF (NYSEArca: IEMG) kept its impressive asset-gathering pace alive with inflows of $50 million. [EM Investors are Getting Skittish]
Due to violent protests in Hong Kong, investors pulled money from various Hong Kong and China equity funds listed around the world. However, the iShares China Large-Cap ETF (NYSEArca: FXI) saw no outflows last week while investors actually poured almost $82.2 million in new capital into the iShares MSCI Hong Kong ETF (NYSEArca: EWH).
With inflows of $1.23 billion, EWH was the best single-country ETF in terms of new assets added during the third quarter and the ninth-best ETF overall in terms of inflows. VWO ranked fourth and IEMG tenth for third-quarter inflows. [Inflows to Hong Kong ETFs]
Despite entering new bear markets last week, the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) and the Market Vectors Russia ETF (NYSEArca: RSX) added $137.4 million and $104 million, respectively, last week.
Despite falling 10.2% over the past month, RSX, the largest and most heavily traded Russia ETF, is in the midst of its best asset-gathering run since 2011. Due to the recent tumble by the Russian ruble, dollar-denominated Russia equity assets have been drubbed while the ruble-denominated benchmark Micex index posted gains in August and September. [Bear Market Not Keep Investors From Russia ETFs]
Investors, however, did not shy away from emerging markets bond funds last week as the iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSEArca: EMB) added almost $90 million in new assets while the Vanguard Emerging Markets Government Bond ETF (NasdaqGS: VWOB) added $15.7 million.
Vanguard FTSE Emerging Markets ETF
ETF Trends editorial team contribute to this post. Tom Lydon’s clients own shares of EEM and EMB.