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Traders Flee Largest Emerging-Debt ETF on Omicron, Fed-Hike Bets

  • EMB lost $709.5 million last week, worst outflow in two months
  • Most withdrawals came a day after Powell’s Fed renomination
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Omicron Variant Adds Uncertainty to Markets: Rabobank

The double whammy of a new coronavirus variant and prospects of tighter policy in the U.S. had investors rethinking their appetite for risky emerging-market bonds last week.

The $19 billion iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) lost $709.5 million in investment in the week ended Nov. 26, the biggest outflow in two months, according to data compiled by Bloomberg. It could mark a turning point for the biggest U.S.-based exchange-traded fund dedicated to emerging debt, which ended six-straight weeks of gains as demand for risk faded. Those withdrawals coincided with a 2.6% drop in the ETF, the worst week since March 2020. The shares were up 0.8% on Monday.