Published on 25 Oct 2023 on ETF Trends via Yahoo Finance

Chart of the Week: Reducing Emerging Markets Risks

This article was originally published on ETFTrends.com.

While developed U.S. and non-U.S. markets indexes were up year to date through October 20, emerging markets benchmarks were treading water. The two largest emerging markets ETFs are the Vanguard FTSE Emerging Markets (VWO) and the iShares Core MSCI Emerging Markets (IEMG). Despite lagging the performance of the SPDR S&P 500 ETF (SPY) this year, the pair has combined net inflows of $6.5 billion. However, advisors have concerns. 

VettaFi held a webcast with KraneShares in mid-October. During the virtual event, we asked advisors, “What is your main concern when investing in emerging markets?” There was a tie for the top answer. The top responses were “China specific risks” and “volatility.” These responses each pulled in 38% of the poll results, ahead of reliability of data/information and passive index deficiencies. We think some advisors are avoiding emerging markets due to these concerns.