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The Zacks Analyst Blog Highlights EEM, CEW, TUR, FLZA, and BNO

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For Immediate Release

Chicago, IL – June 29, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: iShares MSCI Emerging Markets ETF (EEM - Free Report) , WisdomTree Emerging Currency Strategy Fund (CEW - Free Report) , iShares MSCI Turkey ETF (TUR - Free Report) , Franklin FTSE South Africa ETF (FLZA - Free Report) , and Brent crude ETF (BNO - Free Report)

Here are highlights from Tuesday’s Analyst Blog:

Emerging Market ETFs that Topped the S&P 500 in 1H22

The year so far has been caught up with high inflationary pressure across the world due to supply-chain issues, the Russia-Ukraine war, high energy prices, a commodity super-cycle, a super-hawkish Fed, rising rates across the globe as central banks have been tightening policies to rein in inflation, risk-off trade sentiments and a global market crash. The S&P 500 is off 17.9% so far this year (as of Jun 24, 2022).

The S&P 500 and the Nasdaq have entered into correction territory this year as the recessionary fears flared up. The Fed started rate hikes this year and had enacted a 150-bp rise so far this year, which actually caused recessionary fears. iShares MSCI Emerging Markets ETF is off 16.8%.

The broader emerging markets were hurt badly mainly due to pain in Chinese equities. China ETFs were hit hard earlier in the year due to stringent regulatory scrutiny along with tight COVID-control measures and the resultant lockdown. Chinese tech equities started rebounding from late April as the nation's top political leaders planned on Friday to boost economic stimulus to promote growth. There could also be easing of the continued clampdown on tech firms.

A stronger greenback also hurt emerging market ETFs. Most emerging economies' currencies have been falling to multi-year lows against the greenback. Dollar strength also tightened EMs' ability to obtain credit.

Now, developing or emerging countries must tighten their monetary policies to counter declines in their own currencies. Otherwise, it would raise inflation of EMs and push up the cost of servicing dollar-denominated debt. Dollar appreciation has pushed an emerging currency index to an 18-month trough, per Reuters. WisdomTree Emerging Currency Strategy Fund is off 3.5%.

Against this backdrop, below we highlight a few emerging ETFs that breezed past the S&P 500 as well as the broader emerging market ETF this year.

ETFs in Focus

iShares MSCI Turkey ETF – Up 5.9%

Franklin FTSE South Africa ETF – Down 6%

How They Rallied?

Countries like Saudi, Qatar, Nigeria are oil rich. These countries are oil-exporting and hence gained a lot from a massive oil rally this year. Brent crude ETF is up 56% this year. There are a few exceptions like Turkey. Borsa Istanbul's BIST 100 Index hit the highest level this year since data first became available in 1988, per data from Investing.com, as quoted on al-monitor.com.

The Central Bank of Turkey paused its easing cycle in recent times and left the key one-week repo rate steady at 14%. Such a high rate has probably gone in favor of its financial companies. Meanwhile, South Africa also fared better compared with other countries. The country is rich in metals. A commodity rally probably has put South Africa in a better-off position.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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