A strengthening US dollar has contributed to a reversal of fortunes for emerging market equity ETFs after a strong run, with Turkey and Latin America among those hit the hardest by the recent sell-off.
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Emerging market equity and commodity ETPs saw inflows following the Federal Reserve’s decision last week to raise interest rates once again, despite these areas of the market being traditionally considered interest rate sensitive and often suffering redemptions around rate hikes.
Investors have been taking money out of safe-haven gold assets as they react positively to the election of Donald Trump as US President earlier this month, but ETF Securities is predicting a rebound in the price of the precious metal as political uncertainty continues to hit sentiment.
Inflows into emerging market debt ETFs picked up sharply in July amid global market volatility, after Britain voted to leave the European Union and the US Federal Reserve continued to hold interest rates in its latest monthly meeting.