ETF Flows Close To Full Recovery From Pandemic

Emerging-Market ETFs have almost completely recovered from outflows driven from the pandemic.

• Funds had a $2.17b boost last week in $11.5b streak of inflows according to bbg
• The figures represent the sixth straight week of inflows in an $11.5 billion streak that has trimmed the year-to-date outflow to just $1.42 billion.

Inflows were led by the iShares Core MSCI EM ETF, the second largest of its kind, as it received $1.2 billion last week, the largest investment in a year. Bond funds including the iShares JP Morgan USD Emerging Markets Bond ETF, or EMB, and the Vanguard Emerging Markets Government Bond ETF, received about $140 million.

Russia was the highlight among country-specific ETFs, as the top $1.7 billion VanEck Vectors Russia ETF, received an $81 million weekly inflow. Elsewhere, the pace of inflows to China-focused funds slowed down as the $3.6 billion KraneShares CSI China Internet ETF, had a second week of outflows.

The pick-up in overall inflows comes as the MSCI Emerging Markets Index is about to surpass its 2018 high. Signs of progress for a U.S. stimulus deal and hopes that Covid-19 vaccination roll-outs should give the global economy a boost next year are driving investors into riskier assets.

• Bond funds rose by $277.3 million.
• Total assets rose to $302.1 billion from $299.1 billion.
• The MSCI Emerging Markets Index closed up 0.5% from the previous week at 1,257.66, the highest level since Jan 29, 2018. (Data compiled from BBG)