ETF Investors Positive on Emerging Markets

LOW COST FUNDS: Sentiment among ETF investors towards emerging market equities is positive for the first time since October, as global ETF sales top $33.5 billion

Emma Wall 9 May, 2014 | 12:20PM

Emerging markets have been shunned by investors over the past year, put off by volatile markets and poor returns. Rallying developed market indices provided a welcome distraction from slowing Chinese growth and the Fragile Five. But the tide has turned. In the first three months of this year, US equities – the market that outperformed all others in 2013 – have disappointed.

This has forced investors to broaden their horizons, and they are switching their focus back to emerging markets. According to the latest monthly global ETF flows data from Blackrock, emerging market equities gathered $5.9 billion in April, the first positive month since October.

Frontier markets equity ETFs also saw inflows of £200 million, doubling the year-to-date total inflows. Emerging market fixed income ETFs also proved popular, selling $1.3 billion, the most successful month since October 2012.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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