Emerging Market ETF Losses Top $4B in January, Most in 5 Monthsby
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 Week||Flow %||Equity||Bond||FX|
|Region||End Jan. 29||Change||Flow||Flow||Change|
|Total EM Flow||-272.0||-76.7%||-209.2||-62.8||n/a|
|China and Hong Kong||-55.5||50.59%||-53.5||-2.0||0.04%|
|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.|