Emerging market funds kept shedding money this week, but a revival in commodity prices gave some regions a bit of welcome upside.
In all, mutual funds and ETFs that focus on emerging markets equities lost a net $1.1 billion last week — an improvement over the previous week’s loss of $1.6 billion but still a disappointment for those looking for flows to turn positive again.
The flight of capital was especially severe for funds that specialize in Eastern Europe, the Middle East and Africa — the so-called “EMEA” group. These funds shed investor dollars at their highest rate in nearly three years, which indicates that out flows here are at their worst since the credit crisis of 2008.
Funds focused on Taiwan — like iShares MSCI Taiwan Index ETF (NYSE:EWT) — and Korea — like iShares MSCI South Korea Index ETF (NYSE:EWY) — actually gained ground as investors shifted their allocations out of China into other Asian markets.
In the commodity markets, Chinese demand for copper (NYSE:JJC) and iron ore seemed to be reviving, although the threat of power shortages ahead for steel mills kept the iron outlook on the neutral side.
Brazilian stocks surged 2.7% as traders came around to the bargains in the heavily beaten-down local market. Both of the country’s resource-driven heavyweight stocks, Petrobras (NYSE:PBR) and Vale (NYSE:VALE) rebounded on news and a stronger governance outlook.
Chinese stocks ended the week down 5.2%. The selling was due in large part to a disappointing private manufacturing data release that fueled trader fears of slowing growth ahead.
Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.
About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.