Best & Worst Performing Emerging Market ETFs

June 10, 2019

Russia Becoming More Investor Friendly?

The only three non-China ETFs to land in the top EM ETF list are the Franklin FTSE Russia ETF (FLRU) and the iShares MSCI Russia ETF (ERUS), each up more than 19%.

Russian ETFs have been doing well this year after several high-profile companies significantly hiked their dividends this year, bowing to pressure from Russia’s Finance Ministry to give more money back to shareholders.

Energy giant Gazprom more than doubled its dividend unexpectedly in May, fueling a more than 40% increase in its share price. Gazprom is the largest holding for most Russia ETFs, and its recent investor-friendly move has no doubt buoyed sentiment in the broader Russian stock market.

India’s Divergence

While China dominates the best-performing EM ETF list, the other side of the ledger features a more eclectic group of funds.

At the top of this list is the Columbia India Small Cap ETF (SCIN), down 7.4% year to date. SCIN is one of several India-related ETFs that have fared poorly this year despite the recent reelection of business-friendly Prime Minister Narendra Modi.

 

Worst Performing EM ETFs Of 2019 (ex. leveraged/inverse)

Ticker Fund YTD Return (%)
SCIN  Columbia India Small Cap ETF -7.37
INCO  Columbia India Consumer ETF -6.34
SCIF VanEck Vecors India Small-Cap Index ETF -4.48
INXX Columbia India Infrastructure ETF -4.44
TUR iShares MSCI Turkey ETF -4.31
ECH iShares MSCI Chile ETF -3.96
INR Market Vectors-Indian Rupee/USD ETN -2.13
QAT  iShares MSCI Qater ETF -1.33
FXCH Invesco CurrencyShares Chinese Renminbi Trust -0.86
CHIC Global X MSCI China Communication Services ETF -0.74

Note: Data measures total returns for the year-to-date period through June 5

 

Counterintuitively, SCIN and the others on the list, including the Columbia India Consumer ETF (INCO) and the Columbia India Infrastructure ETF (INXX), have done badly, even as the largest ETF in the space, the iShares MSCI India ETF (INDA), has rallied nearly 8% this year.

The difference comes down to exposure. INDA is weighted heavily toward large cap Indian stocks, and financial, technology and energy stocks in particular.

The India ETFs that have lagged this year focus on small caps, industrials and consumer stocks—areas that have underperformed.

Other Underperformers

Outside of India ETFs, other poor-performing EM ETFs include the iShares MSCI Turkey ETF (TUR), the iShares MSCI Chile ETF (ECH), the iShares MSCI Chile ETF (ECH) and the iShares MSCI Qatar ETF (QAT), with losses of 1% to 6.5%.

Ironically, a China equity ETF is also struggling this year, the Global X MSCI China Communication Services ETF (CHIC), down 0.7% even as other China funds surge.

CHII’s performance goes to show that EM ETFs aren’t all built the same. Just as with U.S. funds, exposure can vary widely, so it’s always important to check under the hood.

​Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2

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