Emerging market ETFs have seen outflows for two consecutive weeks, while China has attracted over $50 million in inflows against the trend
Media reports indicate that U.S.-listed emerging market ETFs experienced net outflows for the second consecutive week, with a net outflow of $578 million last week. Among them, equity ETFs saw outflows of $589.6 million, while bond ETFs had a slight inflow of $11.6 million. The outflow of funds from the Indian market was the largest, while China recorded a net inflow of $50.4 million against the trend. The MSCI Emerging Markets Index rose 2.3% during the same period
According to data compiled by the media, investment sentiment in emerging markets remains under pressure.
Data shows that as of the week ending August 8, U.S.-listed emerging market exchange-traded funds (ETFs) investing in stocks and bonds of developing countries experienced a net outflow of funds for the second consecutive week, totaling $578 million, continuing the previous week's withdrawal of $1.11 billion.
However, amidst the overall sluggish environment, the Chinese market has gained significant capital support against the trend, becoming the largest net inflow country last week. Data indicates that the Chinese market attracted a net inflow of $50.4 million last week, mainly driven by ETFs such as American Century Avantis Emerging Markets Equity. Notably, this performance stands in stark contrast to the previous week when the Chinese market saw a capital outflow of $17.9 million.
In contrast, the Indian market faced the largest scale of capital withdrawal, with a net outflow of $388.6 million. In the previous week, the net outflow from the Indian market also reached $298.2 million, ranking first among all emerging markets.
A previous article from Wall Street Insight stated that the direct reason for the capital withdrawal was the Trump administration's trade actions against India. According to CCTV News, Trump announced that starting August 1, a 25% tariff would be imposed on goods exported from India to the U.S., higher than the 15% to 20% range imposed on several other Asian countries.
Analysts from Deutsche Bank and Barclays predict that due to weak foreign capital inflows and the resistance brought by U.S. tariffs, the Indian rupee is expected to continue being one of the worst-performing currencies in Asia in the second half of this year and may fall to a new historical low by the end of the year.
Data shows that last week, emerging market stock ETFs recorded a net outflow of $589.6 million; in contrast, bond ETFs saw a slight net inflow of $11.6 million. Nevertheless, the total asset size of emerging market ETFs still increased from $403.3 billion to $412.5 billion.
In terms of market performance, the MSCI Emerging Markets Index rose 2.3% last week, closing at 1253.79 points
