Emerging markets exchange traded funds have been on a tear to start 2016 and that trend was amplified in March thanks in part to strong performances and some impressive asset-gathering. The Vanguard FTSE Emerging Markets ETF (NYSEArca: VWO) and the iShares MSCI Emerging Markets ETF (NYSEArca: EEM), two largest emerging markets exchange traded funds by assets, were leaders.
Commodities prices are rebounding, in turn bolstering some emerging economies, such as Russia, Brazil and other Latin American nations that are represented in EEM and VWO. Still, some market observers acknowledge emerging markets appear inexpensive because earnings growth is contracting with little sign of rebounding in the near-term.
Last month, EEM hauled in nearly $2.1 billion in new assets while VWO added more than $495 million in new capital.
“Investors pumped more than $1 billion into U.S. exchange traded funds that buy emerging market stocks and bonds last week, bringing the month’s inflows to a record $9 billion,” reports Kenneth Kohn for Bloomberg. “Deposits into emerging-market ETFs that invest across developing nations as well as those that target specific countries totaled $1.11 billion in the week ended April 1, compared with $1.44 billion the previous period, according to data compiled by Bloomberg.”
Although still China and its slowing economic growth loom large for emerging markets ETFs, rebounding oil prices have boosted shares of Russian stocks while anti-corruption probes in Brazil have helped stocks in Latin America’s largest economy rally.[related_stories]