Markets
VWO

ETFs to Watch as Emerging Market Asset Outflow Doubles

Emerging markets have been out of investors' favor over the past several months piling up heavy losses. Domestic strength in the U.S. raising the possibility of a Fed rate hike, lower commodity prices and economic turmoil in China have resulted in a massive sell-off in emerging market stocks in the past few months (read: Emerging Market ETFs Slip to 52-Week Lows ).

The last week was disastrous for the emerging market ETFs as outflows from these funds more than doubled over the previous week, according to data put together by Bloomberg . Outflows from emerging-market ETFs were $566.1 million last week compared with $262.1 million in the previous week. About 85% of the outflow comprised stock funds and the remaining bond funds (read: Q3 ETF Asset Flow Roundup ).

According to Bloomberg, Taiwan witnessed the biggest outflow, all from stock funds. Withdrawal from Taiwan funds reached $93.3 million last week, compared with redemptions of $19.9 million in the previous week (read: Taiwan ETF in Focus on Rate Cut ).

Brazil experienced the second biggest outflow, with more than 90% from stock funds. Investors pulled back $68.7 million from this country ETFs last week in sharp contrast to an inflow of $12.8 million in the previous week (read: S&P Downgrades Brazil to Junk: ETFs in Focus ).

Below we highlight three popular emerging market ETFs that have experienced significant net asset outflow in the week ended October 2 (see all Broad Emerging Market ETFs here).

iShares Core MSCI Emerging Markets ( IEMG ) - $530.9 Million

This ETF tracks the MSCI Emerging Markets Investable Market Index, designed to measure large-, mid- and small-cap equity market performance in 21 emerging market countries. The fund has the highest exposure to China (22.2%), followed by South Korea (15.8%) and Taiwan (13%). It has amassed roughly $7 billion in its asset base while it trades in a volume of roughly 3 million shares a day. It charges 18 bps in fees from investors per year and currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.

Vanguard FTSE Emerging Markets ETF ( VWO ) - $318.8 Million

This is the top asset grossing emerging market ETF, which follows the market-cap weighted FTSE Emerging Index that measures the performance of roughly 850 large and mid cap companies in 22 emerging markets. This fund is also highly focused on China (26.6%), followed by Taiwan (14.1%) and India (12.7%). VWO has garnered nearly $35 billion in assets and trades in a heavy volume of roughly 16 million shares per day. It charges 15 bps in annual fees and carries a Zacks Rank #3 with a Medium risk outlook.

iShares MSCI Emerging Markets Mini Vol ( EEMV ) - $139.5 Million

This ETF tracks the MSCI Emerging Markets Minimum Volatility Index, measuring the performance of large- and mid-cap securities in 21 emerging markets that have lower absolute volatility. EEMV is heavily biased toward China (18.7%) as well, while Taiwan and South Korea occupy the next two spots with shares of 17% and 12.3%, respectively. The fund has gathered around $2.5 billion in assets and trades in an average volume of 500,000 shares. It charges 25 bps in fees per year and carries a Zacks Rank #3 with a Medium risk outlook (read: Playing Emerging Markets? Try the New Ex-China ETF ).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ISHARS-CR MS EM (IEMG): ETF Research Reports

VANGD-FTSE EM (VWO): ETF Research Reports

ISHARS-MS EMMV (EEMV): ETF Research Reports

To read this article on Zacks.com click here.

Zacks Investment Research

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

VWO EEMV IEMG

Other Topics

ETFs

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More