Emerging Market ETFs Suffer $1B Loss in 5th Week of Outflowsby
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 Week||Flow %||Equity||Bond||FX|
|Region||End Feb. 5||Change||Flow||Flow||Change|
|Total EM Flow||-1,161.1||326.9%||-729.8||-431.2||n/a|
|China and Hong Kong||-392.3||-906.92%||-389.9||-2.4||0.03%|
|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.|