Emerging Market ETF Losses Top $4B in January, Most in 5 Months

Investors withdrew $272 million from U.S. exchange traded funds that buy emerging markets stocks and bonds last week, bringing January’s losses to more than $4 billion, the most since August.

Redemptions from emerging-market ETFs that invest across developing nations as well as those that target specific countries totaled $4.13 billion, compared with inflows of $1.36 billion in December, according to data compiled by Bloomberg. Last month’s declines were the worst since August, when they reached $6.13 billion.

Last week’s outflows slowed from $1.2 billion in the previous period, the data show. Stock funds lost $209.2 million and bond funds declined by $62.8 million. The MSCI Emerging Markets Index advanced 4.5 percent in the week, paring January’s decline to 6.5 percent.

The biggest change was in China and Hong Kong, where funds shrank by $55.5 million, compared with $112.4 million of redemptions the previous week. Investors withdrew $53.5 million from stock funds and $2 million from bonds.

The Shanghai Composite Index declined 6.1 percent. The yuan was little changed against the dollar and implied three-month volatility is 8.15 percent.

Brazil had the next-biggest change, with ETF investors redeeming $55 million, compared with $1.9 million of outflows the previous week. Stock funds fell by $46.9 million and bond ETFs decreased by $8.1 million.

The Ibovespa Index gained 6.2 percent. The real appreciated 2.4 percent against the dollar and implied three-month volatility is 19.5 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. 29ChangeFlowFlowChange
================================================================================
Total EM Flow-272.0-76.7%-209.2-62.8n/a
China and Hong Kong-55.550.59%-53.5-2.00.04%
Brazil-55.0n/a-46.9-8.12.37%
Taiwan-54.370.66%-54.30.00.57%
Mexico-38.939.03%-32.3-6.61.85%
India-29.277.96%-29.0-0.3-0.24%
Malaysia-9.163.63%-1.6-7.53.49%
Thailand-8.747.54%-1.5-7.20.90%
Singapore-5.4n/a-5.3-0.10.39%
Turkey-4.865.31%0.8-5.71.57%
Poland-4.660.24%2.6-7.21.22%
Colombia-4.017.14%-0.1-3.80.72%
Chile-2.978.86%-0.4-2.50.57%
Nigeria-2.3n/a-2.30.00.00%
Argentina-2.2n/a-2.50.3-1.72%
Qatar-1.863.75%-2.50.70.03%
Philippines-1.688.61%-0.4-1.2-0.08%
Peru-1.562.12%0.0-1.4-0.72%
Vietnam-0.793.68%-0.70.00.74%
Indonesia-0.398.44%5.3-5.70.49%
Egypt0.0101.76%-0.10.1-0.10%
U.A.E.0.4105.72%0.6-0.20.00%
South Africa1.2102.04%5.3-4.23.64%
South Korea2.8103.14%2.20.60.09%
Russia17.5124.21%20.6-3.13.40%
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*T
NOTE1: For further ETF analysis, download the ETF workbook: XLTP XETFM
NOTE2: For Bloomberg’s ETF screener: ETF
NOTE3: Currency performance for China and Hong Kong is based on the yuan,
stock index uses the Shanghai Composite Index.
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