“EEM tends to be used more by institutional investors that favor MSCI indices and are focused more on liquidity,” Todd Rosenbluth, director of ETF research for CFRA, told the Wall Street Journal. “BlackRock launched the lower-cost Core ETF as a defensive move because money was flowing out of their EEM fund and into Vanguard’s emerging market ETF.”
SEE MORE: Emerging Market ETF Investments Were a Big Theme in August
According to Morningstar data, EEM shows an average daily volume of 68.4 million shares, compared to VWO’s average of 17.6 million shares and IEMG’s 6.0 million.
“Just because you don’t see inflows or outflows doesn’t mean investors aren’t using the product,” Melissa Garville, a spokeswoman for BlackRock Inc., the issuer of the iShares suite of ETFs, told the Wall Street Journal. “There’s still trading volume.”
Moreover, EEM’s lack of flows may reflect investors’ waning interest in emerging market investments after the recent rally. Flows to emerging market funds are “solid, but slowing,” according to the Institute of International Finance.
For more information on ETF flows, visit our ETF performance reports category.