Emerging markets have witnessed massive outflows of investors’ funds. Thus, in January 2014 there was the biggest withdrawal in history, Bloomberg said.
In a month, more than $7 billion flowed from ETFs investing in developing-nation assets. For comparison’s sake, $9 billion was pulled out of ETFs.
Since the beginning of 2014, the iShares MSCI Emerging Markets, one of the largest ETFs, has seen its assets shrink by 11 percent. At the same time, the ETF fell an average 6.5 percent in 2013. Assets of another major ETF, Vanguard FTSE Emerging Markets, fell for the sixth month in a row.
According to Emerging Portfolio Fund Research, Russia-oriented investment funds are selling off their assets for a sixth consecutive week as of January 24. However, in the week of January 16-22, the outflow came in at $15 billion, thus making a six-week low.
Amid a record sell-off of emerging market equity funds, Russia witnesses a sharp rise in exchange rates for dollar and euro. On January 29, the euro hit its highest ever level of 48 rubles on the MICEX. Meanwhile, the dollar rose to a record high of 35 rubles since early 2009.
