Emerging market ETFs surge $2.72 billion, turn positive for year

A file photo of the ETF trading area in the New York Stock Exchange. Photo: Bloomberg

A file photo of the ETF trading area in the New York Stock Exchange. Photo: Bloomberg

New York: Investors added $2.72 billion to US exchange-traded funds that buy emerging-market stocks and bonds, the most in almost two years, as inflows turned positive for the first time in 2016.

Deposits into ETFs that invest across developing nations as well as those that target specific countries during the week ended 18 March compared with $1.67 billion added in the previous period were the highest since reaching $3.37 billion at the start of April 2014, according to data compiled by Bloomberg. So far this year, the funds increased by $1.36 billion.

Last week, stock funds collected $2.43 billion and bond funds advanced by $288.7 million. The MSCI Emerging Markets Index rose 3.2% in the week.

The biggest change was in China and Hong Kong, where funds collected $438.6 million, compared with $40.7 million of inflows the previous week. Investors contributed $437.2 million to stock funds and $1.4 million to bonds.

The Shanghai Composite Index increased 5.2%. The yuan strengthened 0.35% against the dollar and implied three-month volatility is 6.23%.

South Korea had the next-biggest change, with ETF investors adding $353.7 million, compared with $211 million of inflows the previous week. Stock funds grew by $353.2 million and bond ETFs increased by $500,000.

The Kospi gained 1.1%. The won appreciated 2.6% and implied three-month volatility is 10.40%. Bloomberg

[“Source-Livemint”]