Is the Worst Over for These Emerging Market ETFs? - ETF News And Commentary
February 03 2014 - 2:00PM
Zacks
U.S. markets haven’t exactly been holding up well to start 2014.
Concerns about jobs and the taper have hit American securities, and
led to a bit of a sell-off to open up the year.
However, if you thought trading was getting bad in the U.S. market,
you should definitely look away from the emerging market space.
Equities in this part of the investing world have been even harder
hit by the taper, and many are experiencing capital flight issues
(See Best ETF Strategies for 2014).
To fight this, several nations have been raising their rates, a
policy that could stem the tide of outflows. This has had little
impact so far though, and especially so for the following four
nations:
India- Inflation concerns are heating up in India,
while concerns over an election aren’t helping matters either.
Thanks to these worries, along with the taper in the U.S., the most
popular India ETF, the
WisdomTree India Earnings Fund
(EPI) has lost about 8% in the past month, and could face
more weakness in the months ahead.
Turkey- 2013 was not Turkey’s year as political
issues and a currency crisis hurt the nation pretty badly. However,
2014 doesn’t appear to be shaping up too well either, as the
iShares MSCI Turkey ETF (TUR) has lost over 10%
since the start of 2014, and this comes despite a huge rate hike
recently (read 3 Emerging Markets to Watch for Political Issues in
2014).
Brazil- The largest country in South America has
also faced severe currency issues, though a series of rate hikes
has done little to stop the problem. In fact, the
iShares
MSCI Brazil Capped ETF (EWZ) has lost over 9% YTD and
nearly 23% in the past three months.
South Africa- Despite having a plethora of
in-demand commodities, South Africa hasn’t been immune to the
selling pressure, and it too raised rates at its most recent
meeting. And now the main way to play the country, the
iShares MSCI South Africa Index ETF (EZA), has
lost over 12% in the past month, and over 15% in the trailing three
month period.
More Information
For more on these nations and how they have been performing, make
sure to watch our short video below:
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WISDMTR-IN EARN (EPI): ETF Research Reports
ISHARS-BRAZIL (EWZ): ETF Research Reports
ISHARS-S AFRICA (EZA): ETF Research Reports
ISHRS-MSCI TURK (TUR): ETF Research Reports
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