Still, some investors’ risk appetite may be limited for developing economies, particularly with Chinese stocks slumping. China is usually the largest geographic exposure in an array of emerging markets ETFs, including VWO.

“After a couple of years of synchronized growth and increased risk appetite, tightening US financial conditions suggest we are close to the end of this phase of robust global growth,” said FTSE Russell Managing Director Philip Lawlor. “The slippage in leading indicators, flattening US yield curve, commodity selloff and the fading trend in forward-looking GDP forecasts all suggest that the global cycle is peaking: investors will be tempted to ask if this is as good as it gets. Risk appetite and dollar-dependent emerging markets are the first casualties of tightening US-dollar liquidity, and emerging-market sentiment remains extremely negative.”

For more ETF trends in emerging markets, click here.

Tom Lydon’s clients own shares of VWO.