In what is becoming something of an emerging trend, no pun
intended, developing world stocks and many of the
that track them are cascading lower even on days when U.S.
equities rally. The reasons are plentiful and the recent declines
for an array of emerging markets ETFs are staggering.
Weak currencies, slowing growth, concerns about the end of
quantitative easing here in the U.S., interest rate cuts that
have yet to work, interest rate hikes that have proved equally
and other factors
have prompted severe punishment of emerging markets bonds,
currencies and stocks.
That could change on Wednesday if the Federal Reserve signals
the end of easing is not imminent, but that does not change
domestic strife that is plaguing some emerging markets ETF, such
as the following.
iShares MSCI Turkey Investable Market Index Fund (NYSE:
) The iShares MSCI Turkey Investable Market Index Fund has gained
1.6 percent in the past five days, but not be deceived because
the ETF is down 16 percent in the past month. Just weeks after
TUR was boosted by news of Turkey's new investment-grade credit
rating, the arcane and inept leadership of Prime Minister Recep
Tayyip Erdogan is
punishing TUR and the Turkey investment
With the specter of an Arab Spring type of revolution looming,
investors are taking on significant risk for possibly no
near-term reward with TUR. Do not expect things to ease up.
Protesters want Erdogan gone. A fresh wave of demonstrations
indicates as much
Market Vectors Egypt ETF (NYSE:
) Speaking of the Arab Spring, although EGPT has recovered a bit,
it continues to hover near prices not seen
since the Arab Spring.
The easiest way of explaining things in Egypt is that one
dictator has been exchanged for another in the form of current
President Mohammed Morsi. Egypt is already dealing with protests,
but the situation could become even more turbulent as massive
protests are planned for June 30, the anniversary of the day
Morsi ascended to power.
High unemployment, crumbling infrastructure and a precarious
financial position in Egypt have Morsi opponents thinking June 30
could be their best (and last) chance to knock him from power,
according to the Associated Press
iShares MSCI Brazil Capped Index Fund (NYSE:
) Yes, things can get worse for Brazil ETFs and that comes as EWZ
hit another 52-week low Tuesday. President Dilma Rousseff is
popular, but it might only be a matter of time before "is"
becomes "was" as Latin America's largest economy endured its
worst protests in 20 years on Monday.
This is how fed up with things Brazilians are: In one of the
most football-mad (global football, not U.S. football) nations in
the world, citizens protested over, among other things, copious
spending in advance of the 2014 World Cup when the funds would be
better used for hospitals, schools and other necessities.
Market Vectors Indonesia Index ETF (NYSE:
) Give credit where it is due because the Market Vectors
Indonesia Index ETF and the rival iShares MSCI Indonesia
Investable Market Index Fund (NYSE:
) have perked up in recent days. That does not mean investors
should ignore protests over the government's effort to raise fuel
prices in Southeast Asia's largest economy for the first time
These protests involve Molotov cocktails and 19,000
armed military members and police
. That is not a pleasant investing backdrop.
For more on ETFs, click
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