India is once again leading flows into US exchange-traded funds tracking emerging markets, boosting one of the most popular trades in 2023 as declining US yields and a weakening dollar turn investors toward assets in the developing world.
The optimism can be seen in the relentless asset growth of the iShares MSCI Emerging Markets ex-China ETF, known by its ticker EMXC, which gives investors exposure to emerging market equities, excluding Chinese stocks.
The fund has seen total assets grow over 50% so far this quarter, the most for any quarterly period dating back to September 2021, according to data compiled by Bloomberg. The fund’s top geographic allocation is in Indian equities, followed by Taiwanese and South Korean stocks.
“Ultimately, India stands out as its own story, as it offers more attractive scale and demographic dividends than most emerging markets, and does so under a democracy,” said Malcolm Dorson, the head of emerging-market strategy at Global X Management Co. “It’s also coming from a much lower base than most emerging markets, which translates into more growth opportunities.”
Last week, India reported that its economy grew at a much faster pace than forecast in the third quarter as manufacturers boosted production, consumption picked up pace and Prime Minister Narendra Modi’s government ramped up investment before polls next year.
The case for emerging markets has also been boosted by market bets that the Federal Reserve is nearing the end of its tightening cycle, leading the asset class to record its best rally in 2023 in November.
Meanwhile, pessimism in China continues to make traders wary of their exposure in local assets, as a deepening property slump threatens to wipe out jobs, adding to the drivers threatening the country’s growth potential in 2024.
Inflows to U.S.-listed emerging market ETFs that invest across developing nations as well as those that target specific countries totaled $1.08 billion in the week ended Dec. 1, compared with gains of $766.5 million in the previous week, according to data compiled by Bloomberg. So far this year, inflows have totaled $11.2 billion.
- Stock ETFs expanded by $494.6 million.
- Bond funds rose by $588.8 million.
- Total assets rose to $309.8 billion from $307.5 billion.
- The MSCI Emerging Markets Index closed up 0.2 percent from the previous week at 982.14 points.
- India had the biggest inflow, of $192.2 million, led by iShares MSCI India.
- Russia had the biggest outflow, of $11,289, following withdrawals from JP Morgan’s JPMorgan ActiveBuilders Emerging Markets Equity.
Following are tables detailing net flows for emerging-market ETFs in US dollars. The data include the holdings-weighted allocations from multi-country funds, as well as country-specific funds. Latest and historic flows are allocated using latest fund weightings (figures in USD millions unless otherwise stated):
Regional Summary
| Region |
Flow Week |
Flow % Change |
Equity Flow |
Bond Flow |
Total Assets (USD Bln) |
| Total EM |
1,083.4 |
41.3% |
494.6 |
588.8 |
309.8 |
| Americas |
317.7 |
41.0% |
119.6 |
198.1 |
41.3 |
| Asia Pac |
435.1 |
25.1% |
330.4 |
104.6 |
225.4 |
| EMEA |
330.7 |
70.9% |
44.5 |
286.2 |
43.1 |
Americas
| Country |
Flow Week |
Flow % Change |
Equity Flow |
Bond Flow |
Total Assets |
| Mexico |
94.4 |
27.5% |
55.1 |
39.3 |
10,183.3 |
| Brazil |
58.5 |
-5.5% |
33.4 |
25.1 |
23,025.3 |
| Chile |
36.7 |
107.1% |
14.7 |
22.1 |
3,122.6 |
| Colombia |
25.5 |
98.8% |
3.0 |
22.6 |
1,409.6 |
| Argentina |
24.8 |
23.5% |
13.1 |
11.7 |
469.4 |
| Peru |
20.4 |
90.4% |
0.9 |
19.6 |
1,170.4 |
| Panama |
19.1 |
103.1% |
0.0 |
19.1 |
606.6 |
| Uruguay |
14.0 |
114.8% |
-0.4 |
14.5 |
503.5 |
| Costa Rica |
7.1 |
104.8% |
0.0 |
7.1 |
244.0 |
| Ecuador |
6.1 |
111.1% |
0.0 |
6.1 |
166.0 |
| Jamaica |
5.3 |
108.5% |
0.0 |
5.3 |
151.6 |
| Paraguay |
3.1 |
92.9% |
0.0 |
3.1 |
140.3 |
| Trinidad & Tobago |
1.0 |
40.6% |
0.0 |
1.0 |
37.0 |
| Venezuela |
1.0 |
113.7% |
0.0 |
1.0 |
23.0 |
| Bolivia |
0.5 |
101.2% |
0.0 |
0.5 |
15.4 |
Asia Pacific
| Country |
Flow Week |
Flow % Change |
Equity Flow |
Bond Flow |
Total Assets |
| India |
192.2 |
108.4% |
187.1 |
5.1 |
52,143.2 |
| Taiwan |
82.4 |
-51.1% |
82.4 |
0.0 |
44,809.0 |
| Indonesia |
44.6 |
75.7% |
10.0 |
34.6 |
6,899.3 |
| South Korea |
42.3 |
0.5% |
42.3 |
0.0 |
21,681.3 |
| Philippines |
26.1 |
89.3% |
2.4 |
23.7 |
2,534.1 |
| Malaysia |
19.5 |
42.7% |
6.1 |
13.4 |
5,207.4 |
| Thailand |
10.7 |
-32.0% |
10.5 |
0.2 |
6,120.8 |
| Kazakhstan |
5.2 |
129.6% |
0.0 |
5.2 |
269.8 |
| Pakistan |
4.9 |
170.5% |
1.2 |
3.7 |
246.4 |
| Sri Lanka |
4.9 |
109.5% |
0.0 |
4.9 |
135.4 |
| China/Hong Kong |
2.1 |
108.5% |
-11.6 |
13.7 |
84,545.4 |
| Vietnam |
0.1 |
101.8% |
0.1 |
0.0 |
750.1 |
| Mongolia |
0.0 |
-82.3% |
0.0 |
0.0 |
50.1 |
| Bangladesh |
0.0 |
N.A. |
0.0 |
0.0 |
21.3 |
Europe, Middle East & Africa
| Country |
Flow Week |
Flow % Change |
Equity Flow |
Bond Flow |
Total Assets |
| Saudi Arabia |
38.7 |
41.0% |
12.9 |
25.7 |
11,026.6 |
| Turkey |
37.7 |
60.4% |
3.6 |
34.1 |
3,999.6 |
| Qatar |
31.3 |
95.5% |
4.4 |
26.9 |
2,889.4 |
| U.A.E. |
31.0 |
73.9% |
5.2 |
25.8 |
4,242.8 |
| South Africa |
30.5 |
29.8% |
9.6 |
21.0 |
8,494.1 |
| Oman |
22.8 |
106.3% |
0.0 |
22.8 |
721.5 |
| Bahrain |
18.0 |
103.0% |
0.0 |
18.0 |
586.7 |
| Hungary |
17.9 |
94.4% |
0.7 |
17.2 |
1,287.6 |
| Poland |
17.0 |
64.7% |
3.3 |
13.6 |
2,445.1 |
| Egypt |
16.2 |
104.0% |
0.2 |
16.0 |
925.0 |
| Romania |
14.5 |
106.2% |
0.0 |
14.5 |
831.3 |
| Nigeria |
13.2 |
104.1% |
0.0 |
13.2 |
482.7 |
| Kuwait |
7.7 |
64.2% |
3.1 |
4.6 |
2,005.5 |
| Jordan |
5.7 |
108.6% |
0.0 |
5.7 |
220.9 |
| Ghana |
5.0 |
109.1% |
0.0 |
5.0 |
139.2 |
| Morocco |
4.6 |
89.4% |
0.0 |
4.6 |
229.3 |
| Ukraine |
4.4 |
101.5% |
0.0 |
4.4 |
120.1 |
| Kenya |
3.7 |
108.8% |
0.0 |
3.7 |
152.8 |
| Serbia |
2.1 |
97.6% |
0.0 |
2.1 |
120.4 |
| Senegal |
1.8 |
111.6% |
0.0 |
1.8 |
50.0 |
| Czech Republic |
1.6 |
52.8% |
1.5 |
0.1 |
670.2 |
| Iraq |
1.5 |
108.9% |
0.0 |
1.5 |
43.4 |
| Zambia |
1.5 |
111.1% |
0.0 |
1.5 |
36.9 |
| Ivory Coast |
1.2 |
113.0% |
0.0 |
1.2 |
37.2 |
| Tunisia |
0.8 |
108.5% |
0.0 |
0.8 |
20.7 |
| Lebanon |
0.5 |
105.4% |
0.0 |
0.5 |
14.5 |
| Greece |
0.0 |
-98.2% |
0.0 |
0.0 |
1,266.3 |
| Mauritius |
0.0 |
-98.4% |
0.0 |
0.0 |
20.7 |
| Gabon |
0.0 |
-63.5% |
0.0 |
0.0 |
6.3 |
| Mozambique |
0.0 |
-58.9% |
0.0 |
0.0 |
2.6 |
| Lithuania |
0.0 |
N.A. |
0.0 |
0.0 |
4.3 |
| Russia |
0.0 |
-334.7% |
0.0 |
0.0 |
1.4 |
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