Emerging-Market ETFs Suffer Worst Loss in 8 Weeks, Led by Taiwan

U.S. exchange-traded funds that invest in emerging markets had the biggest net outflows since mid-November, led by withdrawals from Taiwan and India.

Redemptions from ETFs that invest across developing nations as well as those that target specific countries totaled $566.7 million in the week ended Jan. 8, compared with inflows of $431.3 million in the previous period, according to data compiled by Bloomberg. The last time investors pulled more money from the funds was in the week of Nov. 13, when outflows reached $1.06 billion, the data show.

Last week, stock funds lost $507.3 million and bond funds declined by $59.4 million. The MSCI Emerging Markets Index fell 6.8 percent in the week.

The biggest outflows were in Taiwan, where funds shrank by $164 million, compared with $26 million of inflows the previous week. All of the withdrawals were from stock funds, while bond funds remained unchanged.

The Taiex declined 5.3 percent. The Taiwan dollar weakened 1.5 percent against the U.S. currency and implied three-month volatility is 7.8 percent.

India had the next-biggest losses, with ETF investors redeeming $116.6 million, compared with $33.5 million of outflows the previous week. The withdrawals all came from stock funds.

The S&P BSE Sensex lost 4.7 percent. The rupee depreciated 0.7 percent against the dollar and implied three-month volatility is 6.8 percent.

Following is a table detailing net inflows and outflows for emerging-market ETFs. The data include the index-weighted allocations from the biggest multi-country funds, such as the Vanguard FTSE Emerging Markets ETF and iShares MSCI Emerging Markets ETF, as well as country-specific funds:

Flow WeekFlow %EquityBondFX
RegionEnd Jan. 8ChangeFlowFlowChange
================================================================================
Total EM Flow-566.7-231.4%-507.3-59.4n/a
Taiwan-164.0-731.67%-164.00.0-1.53%
India-116.6-248.49%-116.70.0-0.74%
South Korea-74.3-207.39%-73.3-1.0-2.11%
China and Hong Kong-32.0-208.40%-32.20.2-1.53%
South Africa-21.9-220.62%-20.1-1.9-4.58%
Brazil-15.7-969.22%-13.0-2.7-1.59%
Turkey-15.0-353.04%-12.2-2.8-3.27%
Poland-14.4-274.86%-12.6-1.8-1.27%
Mexico-13.6-162.76%-11.2-2.4-3.75%
Indonesia-12.5-223.75%-10.1-2.5-0.67%
Russia-10.9-126.01%-8.3-2.5-2.98%
Chile-10.2-351.22%-9.8-0.4-2.63%
Philippines-9.2-247.74%-7.2-2.1-0.64%
Malaysia-6.1-141.61%-5.4-0.7-2.25%
Thailand-4.4-234.08%-4.40.0-0.78%
Singapore-4.166.49%-3.9-0.2-2.12%
Peru-2.1-177.25%-0.3-1.8-0.36%
Colombia-1.6-148.33%-0.1-1.6-2.83%
Qatar-1.5-132.96%-0.9-0.60.02%
Argentina-1.4-178.45%0.0-1.4-6.80%
U.A.E.-0.7-117.46%-1.10.40.00%
Egypt-0.4-132.80%-0.2-0.2-0.03%
Nigeria-0.2-602.69%-0.10.0-0.18%
Vietnam5.1n/a5.2-0.10.16%
Before it's here, it's on the Bloomberg Terminal. LEARN MORE