Emerging Markets Lower After Market Bloodbath

Data suggest investors are positioning for more emerging markets upside. In the first quarter, investors allocated $6.13 billion to IEMG. Only one ETF saw larger inflows in the first three months of the year. EEM saw first-quarter inflows of $2.60 billion, good for the eighth-best total among US-listed ETFs.

“Furthermore, trade has proved to be the biggest driver of the economic expansion, which has benefited emerging market equities most. Talk of protectionism in the U.S. plays strongly into the hands of China, pushing down the dollar’s relative value. In turn, this will continue to create opportunities in emerging market equities,” according to CNBC.

BlackRock is bullish on China, Brazil and India. Those countries combine for over 44% of IEMG’s weight. The major ETFs tracking those markets all slipped Monday. Indian stocks are negative on the year while Brazil is the best-performing market among that trio.

IEMG debuted just over five years ago as the low-cost alternative to EEM. With investors increasingly prioritizing fees in the ETF evaluation process, IEMG’s status as a cost-effective avenue to emerging markets stocks has helped the fund grow at a blistering pace.

For more information on the developing economies, visit our emerging markets category.