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These Emerging Markets ETFs Are Seeing Huge Inflows

Friday, October 28, 2016 10:41
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Emerging marketsSomeone is buying Emerging Markets based ETFs late in the trading week, as we have seen big inflows in several products in the space
representing both equity and fixed income.

VWO (Vanguard FTSE Emerging Markets, Expense Ratio 0.15%, $44.8 billion in AUM) has seen more than $420 million enter the fund late in the week on elevated trading volume yesterday, while competing ETF from iShares, IEMG (iShares Core MSCI Emerging Markets, Expense Ratio 0.14%, $17.8 billion in AUM) has pulled in more than $220 million during this same timeframe.


As we have noted in this segment in the past, IEMG has had a stellar year in terms of asset building via inflows (>$6.3 billion in), as the fund which debuted about four years ago in October of 2012 has proven to be a serious contender for asset supremacy in the space against two clearly more tenured funds, both VWO and also from iShares, the $31.5 billion EEM (iShares MSCI Emerging Markets, Expense Ratio 0.67%) which debuted in 2005 and 2003 respectively.

VWO has seen healthy inflows year-to-date as well to the tune of $5.1 billion in, but IEMG’s year-to-date net inflows are much more impressive given the initial AUM size of the fund going into the year and the significant creation of new shares, indicating a sharp increase in institutional usage in the fund. Also, it does not appear that IEMG is pulling in new assets at the expense of its more expensive “sister” ETF, EEM, within the iShares family, as EEM has attracted more than $6.7 billion in new assets as well this year. Rather, all of these funds are participating in healthy retail and institutional appetite in 2016 for Emerging Markets Equity ETFs.

The activity this week has not been confined to just Emerging Markets Equity products, but also a notable “Fixed Income” offering in the space, EMB (iShares JPMorgan USD Emerging Markets Bond, Expense Ratio 0.60%), which now has $9.8 billion in assets under management thanks to year-to-date inflows of an impressive $4.7 billion in. EMB is the largest Emerging Markets Bond fund by a large margin, as it is more than twice the size of the next biggest fund in the space, PCY (PowerShares Emerging Markets Sovereign Debt Portfolio, Expense Ratio 0.50%, $4.1 billion in AUM).

Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch
paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.

Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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