Emerging Market ETFs Suffer $1B Loss in 5th Week of Outflows

Investors pulled more than $1 billion out of U.S. exchange traded funds that invest in emerging markets last week, leaving the ETFs in the longest losing streak since September.

Redemptions from emerging-market ETFs that invest across developing nations as well as those that target specific countries totaled $1.16 billion last week, compared with withdrawals of $272 million in the previous period, according to data compiled by Bloomberg. Losses so far this year total $5.29 billion. Deposits in the funds declined for the fifth straight week, the worst stretch since 11 weeks that ended in mid-September. 

Last week, stock funds lost $729.9 million and bond funds declined by $431.2 million. The MSCI Emerging Markets Index declined 0.4 percent in the week.

The biggest change was in China and Hong Kong, where funds shrank by $392.3 million, compared with $39 million the previous week. Investors withdrew $389.9 million from stock funds and $2.4 million from bonds.

The Shanghai Composite Index advanced 0.9 percent. The yuan was little changed against the dollar and implied three-month volatility is 8.6 percent.

Taiwan had the next-biggest change, with ETF investors redeeming $136.9 million, compared with $54.3 million the previous week. All the losses were from stock funds.

The Taiex lost 1 percent. The Taiwan dollar appreciated 0.44 percent against the dollar and implied three-month volatility is 8.73 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 Feb. 5ChangeFlowFlowChange
================================================================================
Total EM Flow-1,161.1326.9%-729.8-431.2n/a
China and Hong Kong-392.3-906.92%-389.9-2.40.03%
Taiwan-136.9-152.16%-136.90.00.44%
India-110.5-278.24%-110.1-0.40.21%
Brazil-51.1-530.88%-28.4-22.72.44%
Malaysia-35.0-286.75%-20.7-14.4-0.13%
Turkey-34.8-618.51%-13.4-21.41.28%
Philippines-29.0n/a-8.5-20.50.14%
Russia-28.3-262.09%-9.5-18.8-2.57%
South Africa-27.1n/a-11.8-15.3-0.85%
Mexico-26.132.99%4.1-30.2-1.81%
Poland-22.0-378.98%-4.3-17.73.24%
Colombia-19.2-380.97%-2.6-16.6-1.45%
Thailand-16.0-83.77%-11.8-4.20.30%
Peru-13.7-844.58%-0.9-12.8-0.23%
Argentina-10.4-371.39%-1.0-9.4-2.89%
Indonesia-8.2n/a12.7-20.91.13%
Singapore-6.2-14.41%-6.20.01.14%
South Korea-4.1-245.71%10.5-14.60.13%
U.A.E.-3.6n/a-3.60.00.00%
Egypt-3.4n/a-1.2-2.20.00%
Nigeria-2.3-0.11%-1.0-1.4-0.15%
Vietnam-1.8-157.40%-0.9-0.9-0.25%
Qatar-0.193.40%0.5-0.7-0.01%
Chile17.6706.83%24.5-7.00.97%
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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