It is not a stretch to say that plenty of investors are well
aware of the broad-based damage being inflicted upon emerging
. Heading into the start of trading, the Vanguard FTSE Emergign
Markets ETF (NYSE:
) and the iShares MSCI Emerging Markets Index Fund (NYSE:
), the two largest emerging markets ETFs, were both off more than
nine percent in the past month.
One reason investors have embraced ETFs such as VWO and EEM
over the years is because of country diversification, or the
ability to dodge single country risk. Said another way, a nine
percent drop in a month is nothing to brag about, but things are
much worse for some other emerging markets ETFs. Some
country-specific funds are being taken to the woodshed. Just look
at these jaw-dropping facts, but take heart because there are
some pleasant surprises on this list.
Asia Earlier this year while the BRIC quartet and other large
developing markets such as South Korea and South Africa, folks
were complaining that all emerging markets were laggards. That
meant they were ignoring stellar performances turned by ETFs with
heavy exposure to markets such as Indonesia, the Philippines and
That was then and this is now and now the investors that did
embrace those markets
are tripping over themselves to get out
Despite an abundance of good news, the iShares MSCI
Philippines Investable Market Index Fund (NYSE:
) ended May
flirting with a correction
. A plunging baht had the iShares MSCI Thailand Capped Investable
Market Index Fund (NYSE:
) on a similar trajectory. In two weeks, things have gotten much
FACT: EPHE's current four-week decline now equals about 18.5
percent. FACT: This is the second-worst decline in the ETF's
less-than-three-year trading history. FACT: Another 1.5 percent
off and EPHE enters bear market territory.
As for THD, things are no better.
FACT: Even with Thursday's bounce, the Thailand ETF is down 16
percent in the past month. FACT: That decline is worse than the
2011 post-typhoon drop. FACT: THD's current downward spiral is
worse than what was seen during the 2010 Red Shirt/Yellow Shirt
Latin America This is a point that has been
hammered quite a bit recently
, but for those that do not know, Latin America ETFs are a mess
right now. Brazil's Bovespa entered a bear market earlier this
FACT: The iShares MSCI Brazil Capped Index Fund (NYSE:
) is trading around $48. If it falls another $2, the ETF will
touch its lowest levels in 50 months. FACT: Chile
has its own problems
. Even with today's three percent jump, the iShares MSCI Chile
Capped Investable Market Index Fund (NYSE:
) only needs to fall another five percent to enter bear market
territory. FACT: The iShares MSCI All Peru Capped Index Fund
) is in a bear market on a year-to-date basis. FACT: If EPU
closes below $35, it will be its worst close since October
Pleasant Surprises Yes, there are some.
FACT: Investors are not departing ALL emerging markets ETFs.
The iShares MSCI Emerging Markets Minimum Volatility Index Fund
) says as much with
June inflows of almost $161 million
. FACT: The iShares Emerging Markets Dividend Index Fund (NYSE:
) has drawn in $5.1 million this month. FACT: Not all emerging
markets are falling. The Market Vectors Poland ETF (NYSE:
) is up 6.6 percent in the past month. FACT: Frontier markets
rock. In the past month, the iShares MSCI Frontier 100 ETF (NYSE:
), the WisdomTree Middle East Dividend Fund (NASDAQ:
) and the PowerShares MENA Frontier Countries ETF (NASDAQ:
) are all higher in the past month.
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Profit with More New & Research
. Gain access to a streaming platform with all the information
you need to invest better today.
Click here to start your 14 Day Trial of Benzinga