Investors should look at the emerging market equities as a more cyclical asset. Currently, after years of outperformance in the developed markets, the emerging markets are beginning to show a lower premium to more developed countries. [Look to Emerging Market ETFs in the Second Half]
“Equity outflows from developing nations increased to $8.7 billion this month, the highest level since the taper tantrum of 2013 when the prospect of higher rates in the U.S., making riskier assets less attractive, first shook emerging markets,” according to Bloomberg.
Since July 2014, more than $1 trillion has been pulled from emerging markets stocks and funds, including mutual funds and ETFs.
iShares MSCI Emerging Markets ETF