Emerging Markets Meltdown

| January 29, 2014 | 0 Comments

losersEmerging markets are taking a beating.

Many have speculated that emerging market stocks have benefited more from the Fed’s QE program than any other asset class.  And the selloff in emerging markets was inevitable now that the Fed has begun tapering off their stimulus.

But that’s not the only thing weighing on emerging markets…

The latest round of trouble was sparked by disappointing growth in China and Argentina’s decision to devalue its currency.    

Right now, foreign investors are pulling massive amounts of money out of emerging markets.  The countries most at risk are those with large debt loads and a heavy dependence on foreign funding.

Let’s take a look at three emerging markets ETFs with the worst performance over the last week…   

iShares MSCI India Small Cap Index Fund (SMIN)

SMIN’s 8.25% drop over the last week makes it the worst performing emerging market ETF last week.  It’s down a total of 10.65% year-to-date.

This ETF holds 148 small cap stocks that trade on Indian securities market.  They represent smallest 14% of Indian stocks.   

It has a dividend yield of 0.81% and an expense ratio of 0.74%.

EG Shares India Small Cap (SCIN)

SCIN was the second worse performing emerging market ETF last week with a 7.44% drop.  It’s down 11.42% year-to-date.

This ETF has 76 holdings.  It has an expense ratio of 0.85% and a dividend yield of 2.68%. 

VelocityShares Emerging Asia (ASDR)

ASDR’s 6.97% loss last week rounds out our top 3 worst performing emerging markets ETFs. 

This ETF tracks an index of 152 Asian ADR’s that trade on US exchanges.  It has an expense ratio of 0.65%. 

Here’s the upshot…

Emerging markets are taking a pounding because there are economic, political, and currency issues plaguing emerging markets.  As a result, investors’ expectations are depressed.  And until market psychology changes, they will continue to be under pressure.

Good Investing,

Corey Williams

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Category: ETFs, Foreign Market ETFs

About the Author ()

Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets three times a week. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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