Emerging Market ETFs Lose Investors for 6th Week, Led by China

Investors pulled money out of U.S. exchange traded funds that buy emerging-market stocks and bonds for the sixth straight week, bringing this year’s total losses to $5.73 billion. 

Redemptions from emerging-market ETFs that invest across developing nations as well as those that target specific countries totaled $436.3 million in the week ended Feb. 12 compared with withdrawals of $1.16 billion in the previous period, according to data compiled by Bloomberg. The losing streak is the longest since the 11 weeks that ended Sept. 11.

Last week, stock funds lost $262.8 million and bond funds declined by $173.5 million. The MSCI Emerging Markets Index fell 3.8 percent in the week.

The biggest change was in China and Hong Kong, where funds shrank by $108.7 million, compared with $231.2 million of redemptions the previous week. Investors withdrew $106.6 million from stock funds and $2.1 million from bonds.

The Shanghai Composite Index remained unchanged. The yuan was little changed against the dollar and implied three-month volatility is 8.25 percent.

Mexico had the next-biggest change, with ETF investors redeeming $39.8 million, compared with $26.1 million of outflows the previous week. Stock funds fell by $28.2 million and bond ETFs decreased by $11.6 million.

The Mexico IPC Index lost 1.9 percent. The peso depreciated 2.5 percent against the dollar and implied three-month volatility is 15.38 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. 12ChangeFlowFlowChange
================================================================================
Total EM Flow-436.3-62.4%-262.8-173.5n/a
China and Hong Kong-108.752.98%-106.6-2.10.00%
Mexico-39.8-52.51%-28.2-11.6-2.48%
India-37.765.89%-36.8-0.9-0.85%
Russia-32.4-14.49%-25.2-7.2-1.43%
Taiwan-29.178.72%-29.10.00.50%
South Africa-23.413.63%-18.0-5.40.91%
Brazil-22.03.29%-14.0-8.0-2.48%
Turkey-14.757.81%-7.1-7.6-0.43%
Singapore-13.8-123.54%-13.80.00.74%
Malaysia-13.262.18%-8.7-4.6-0.25%
Philippines-12.058.50%-3.9-8.10.14%
Poland-11.049.98%-3.1-7.91.19%
Colombia-8.158.03%-1.1-6.9-1.46%
Peru-6.155.40%-0.4-5.7-0.74%
Thailand-5.367.08%-5.60.3-0.01%
Argentina-4.854.20%-1.1-3.6-2.85%
South Korea-4.7-13.49%0.0-4.7-1.16%
Nigeria-2.111.28%-1.9-0.10.09%
U.A.E.-1.752.74%-1.70.00.00%
Egypt-1.557.66%-0.6-0.90.04%
Vietnam-1.046.62%-0.6-0.4-0.14%
Qatar-1.0-686.86%0.0-0.9-0.01%
Chile12.2-30.53%15.1-2.9-0.16%
Indonesia38.7570.92%46.3-7.60.99%
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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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