Money flows out of emerging market ETFs

Arrow down1A revival of market concerns that the US Federal Reserve will soon begin tapering its bond purchases may have driven a turnaround in flows to emerging market equity exchange-traded funds (ETFs).

A net $4.7 billion was withdrawn from emerging market equity ETFs in November, according to research by BlackRock, following two months in which net new money flowed into the products.

In contrast, developed market equity ETFs took in a net $21.5 billion, seeming to indicate that investors believe developed markets will fare better under the Fed's policy.

“Investors’ appetite for risk moderated during the month,” says the report from BlackRock. “Continued evidence of slow yet steady economic growth in the US and worldwide increased the likelihood of accommodative monetary policy for the foreseeable future.”

In all, global ETF inflows measured by the firm were a net $15.8 billion in November.

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