Worries over slowing economic growth in China are weighing on emerging market ETFs, which many financial pundits predicted would outperform developed countries in 2012.
Direct investment into China fell for a fifth month, raising concern weaker growth in the world’s second-largest economy may weigh on riskier assets, Bloomberg News reports.
Vanguard MSCI Emerging Markets (NYSEArca: VWO) and iShares MSCI Emerging Markets (NYSEArca: EEM) are down about 4% the past month, although they are outperforming the S&P 500 year to date thanks to a strong start.
China is the largest country allocation in EEM at 17.5% of the portfolio.