Emerging Market ETFs Surge $2.72 Billion, Turn Positive for Year

Investors added $2.72 billion to U.S. exchange-traded funds that buy emerging-market stocks and bonds, the most in almost two years, as inflows turned positive for the first time in 2016.

Deposits into ETFs that invest across developing nations as well as those that target specific countries during the week ended March 18 compared with $1.67 billion added in the previous period and were the highest since reaching $3.37 billion at the start of April 2014, according to data compiled by Bloomberg. So far this year, the funds increased by $1.36 billion.

Last week, stock funds collected $2.43 billion and bond funds advanced by $288.7 million. The MSCI Emerging Markets Index rose 3.2 percent in the week.

The biggest change was in China and Hong Kong, where funds collected $438.6 million, compared with $40.7 million of inflows the previous week. Investors contributed $437.2 million to stock funds and $1.4 million to bonds.

The Shanghai Composite Index increased 5.2 percent. The yuan strengthened 0.35 percent against the dollar and implied three-month volatility is 6.23 percent.

South Korea had the next-biggest change, with ETF investors adding $353.7 million, compared with $211 million of inflows the previous week. Stock funds grew by $353.2 million and bond ETFs increased by $500,000.

The Kospi gained 1.1 percent. The won appreciated 2.6 percent and implied three-month volatility is 10.40 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 March 18ChangeFlowFlowChange
================================================================================
Total EM Flow2,719.762.4%2,430.9288.7n/a
China and Hong Kong438.6978.92%437.21.40.35%
South Korea353.767.60%353.20.52.63%
India314.4214.66%314.10.30.82%
Taiwan311.7142.62%311.70.01.35%
Mexico180.472.84%161.319.01.76%
Brazil145.6925.69%132.513.0-1.07%
South Africa126.940.31%116.210.8-0.26%
Russia108.415.78%95.213.22.15%
Indonesia97.323.39%82.614.7-0.32%
Malaysia81.715.96%71.310.40.84%
Thailand77.9101.49%75.02.90.40%
Turkey63.0109.15%47.815.30.03%
Chile60.074.58%54.55.51.11%
Philippines51.128.85%37.913.20.65%
Poland39.921.87%25.714.21.78%
Peru35.3104.86%25.69.7-0.56%
Qatar22.7227.02%21.61.20.00%
Colombia22.220.41%10.611.62.54%
U.A.E.20.5134.47%20.50.00.00%
Argentina6.8-29.29%0.66.20.51%
Egypt6.257.66%4.71.5-11.76%
Singapore4.2n/a4.30.01.12%
Nigeria-1.1#DIV/0!-0.9-0.1-0.03%
Vietnam-2.3-439.52%-2.90.60.00%
================================================================================
*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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