Emerging market ETFs attract investors

Emerging market ETFs gained a capital inflow of $109 million during this year. While they lost $13.9 billion in the first two months of 2014, investors are returning to exchange traded products investing in emerging markets.

US based ETFs received $645 million last week only. This number is said to be a result of the demand for high yield assets and the optimism of money managers regarding the development in emerging economies.

The biggest fund provider BlackRock received additional $2 billion from investors in 2014. In March, BlackRock’s iShares MSCI Emerging Market ETF reached a volume of $42 billion gaining additional capital of $9 billion.

Still, risks in emerging economies are large due to possible changes in the Fed’s interest rate policy, capital in- and outflows and, as a result, exchange rate changes.