Emerging Market ETFs See Fourth Consecutive Week of Inflows

Traders plowed cash into exchange-traded funds that buy emerging market stocks for a fourth straight week as risk-appetite grew, turning flows this year positive for the first time since early April.

The $9.7 billion Avantis Emerging Markets Equity ETF recorded more than $1 billion in inflows last week, its biggest jump in new cash ever recorded. That accounted for over half of the inflows into US-listed emerging market ETFs that invest across developing nations, according to data compiled by Bloomberg.

Across emerging markets, China had the biggest inflow, with $669.1 million last week after the world’s two-biggest economies surprised with a massive — albeit temporary — reduction in tariffs. The truce between the two nations drove assets across the developing world higher as it eased concern that a trade war would ignite a global recession.

“Last week, we saw the US take steps towards trade resolution with China, and that was a big catalyst for people to move money back into the asset class,” said Malcolm Dorson, senior portfolio manager at Global X Management. “The recent Moody’s downgrade is only adding fuel to fire, and we think this rally is sustainable.”