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Emerging Market Equities Ended the Week with Positive Flows

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Highest weekly flows

Emerging market equities received $1.37 billion of new flows for the week ended April 24, 2015. The amount is a record in the past few weeks, and China and Brazil were the leading recipients. The inflows were higher than the negative flows from the US (SPX) and lower than the total inflows for European equities (EFA).

Asset managers such as BlackRock (BLK), Fidelity Investments, Franklin Resources (BEN), Goldman Sachs (GS), HSBC Asset Management (HSBC), and Blackstone (BX) have increased their asset allocations in this market class. They’re betting that major economies will adopt an aggressive monetary policy stance to support growth. Investments in emerging markets (EEM) form approximately 12% of worldwide investments in terms of mutual funds and ETFs.

The emerging economy offerings by mutual funds and ETF providers are expected to increase. Reform initiatives by major countries to further open economies, remove currency restrictions, and deploy funds are helping emerging regions attract more funds.

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ETFs for emerging markets

Emerging market ETF options have increased over the past few years. Asset managers, including BlackRock (BLK), J.P. Morgan (JPM), Deutsche Asset & Wealth Management (DB), and others now offer their investment products in emerging markets. Net flows are likely to rise for ETFs associated with performing economies.

Major ETFs such as the iShares MSCI Emerging Markets (EEM), the iShares Core MSCI Emerging Markets (IEMG), the WisdomTree India Earnings Fund (EPI), the iShares MSCI Emerging Markets Minimum Volatility ETF (EEMV), and the iShares MSCI India ETF (INDA) attracted positive flows totaling $0.76 billion for the week ended April 24, 2015.

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