A Stellar First Half For Emerging Markets ETFs

In the second quarter, IEMG and VWO added $7.5 billion in new assets on a combined basis. Seven of the top 10 ETFs in terms of new assets added in the second quarter were emerging markets funds.

“May marked the strongest pace of emerging markets net capital inflows, excluding China, since the U.S. election, rising to $16.5 billion. That was up from $2.5 billion in April. IIF reported that the strong upswing was mainly driven by robust inflows to Turkey, at $9.2 billion, India with $9 billion, and Mexico, at $2.3 billion. In contrast, net capital flows to Brazil turned negative in May, IIF said, hurt by a sharp contraction in non-resident capital inflows,” according to Reuters.

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IEMG was the most popular ETF of the first quarter, bringing in $6.6 billion in net inflows so far this year, according to XTF data. Investors may be looking at this cheap EM option as a way to gain access to emerging markets where valuations are much lower than the loftier prices in U.S. markets.

For more information on the ETF market, visit our ETF performance reports category.