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The month of January was marked by the outbreak of coronavirus in China and the way it spread to various other countries. Within about 10 days of reporting, the disease turned severe with confirmed cases and a rising death toll. The World Health Organization termed the virus attack a global health emergency.
No wonder, Chinese stocks suffered a lot with the Shanghai Composite Index losing about 8% on Feb 3, marking its biggest single-day decline for more than four years and shedding $420 billion from its value. The ripple effect obviously did not spare the peripheral emerging economies. As a result, January was the worst month since August for emerging-market stocks and currencies as selling pressure built up on the rising fear about coronavirus (read: Is Coronavirus an "Opportunity" for Emerging Markets ETFs?).
MSCI emerging market (EM) index closed out January with about 5% slump. The index has been on a downtrend for eight days in a row. “With the number of deaths in mainland China overtaking the 2003 SARS epidemic and the number of cases infected reaching more than 17,000, it is unknown when this epidemic will come to an end,” per the chief market strategist at FXTM. Not only in China, the pain accelerated in other parts of the EM space too. Russian manufacturing contracted for the ninth month in January.
Against this backdrop, below we highlight a few ETFs that underperformed the most in January.
The underlying Pacer Emerging Markets Cash Cows 100 Index uses an objective, rules-based methodology to provide exposure to large and mid-capitalization companies in emerging markets with high free cash flow yields. The fund yields about 8.72% annually.
Invesco Strategic Emerging Markets ETF – Down 9.3%
The underlying Invesco Strategic Emerging Markets Index measures the performance of high-quality, large-sized emerging market companies. It yields about 2.45% annually.
KraneShares MSCI One Belt One Road ETF (OBOR - Free Report) – Down 8.4%
The underlying MSCI Global China Infrastructure Exposure Index looks to identify potential beneficiaries of the One Belt One Road initiative based on how their geography, revenues and sector attributes align with the broad theme. Countries that may benefit from the OBOR initiative are the likes of China, Russia, Singapore, Malaysia and Israel.
Global X SuperDividend Emerging Markets ETF (SDEM - Free Report) – Down 8.4%
The underlying MSCI Emerging Markets Top 50 Dividend Index tracks the performance of 50 equally weighted companies that rank among the highest dividend-yielding equity securities in emerging markets. The fund yields 7.02% annually.
Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE - Free Report) – Down 8.3%
The underlying Russell RAFI Emerging Markets Large Company Index (Net) ranks companies on the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those whose fundamental scores are in the top 87.5% of the Russell Emerging Markets Index. It yields 3.77% annually.
WisdomTree Emerging Markets Equity Income Fund (DEM - Free Report) – Down 8.3%
The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of the highest dividend-yielding stocks selected from the WisdomTree Emerging Markets Dividend Index. The fund yields 5.21% annually.
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Worst-Performing EM ETFs of January
The month of January was marked by the outbreak of coronavirus in China and the way it spread to various other countries. Within about 10 days of reporting, the disease turned severe with confirmed cases and a rising death toll. The World Health Organization termed the virus attack a global health emergency.
No wonder, Chinese stocks suffered a lot with the Shanghai Composite Index losing about 8% on Feb 3, marking its biggest single-day decline for more than four years and shedding $420 billion from its value. The ripple effect obviously did not spare the peripheral emerging economies. As a result, January was the worst month since August for emerging-market stocks and currencies as selling pressure built up on the rising fear about coronavirus (read: Is Coronavirus an "Opportunity" for Emerging Markets ETFs?).
MSCI emerging market (EM) index closed out January with about 5% slump. The index has been on a downtrend for eight days in a row. “With the number of deaths in mainland China overtaking the 2003 SARS epidemic and the number of cases infected reaching more than 17,000, it is unknown when this epidemic will come to an end,” per the chief market strategist at FXTM. Not only in China, the pain accelerated in other parts of the EM space too. Russian manufacturing contracted for the ninth month in January.
Against this backdrop, below we highlight a few ETFs that underperformed the most in January.
Pacer Emerging Markets Cash Cows 100 ETF (ECOW - Free Report) – Down 9.6%
The underlying Pacer Emerging Markets Cash Cows 100 Index uses an objective, rules-based methodology to provide exposure to large and mid-capitalization companies in emerging markets with high free cash flow yields. The fund yields about 8.72% annually.
Invesco Strategic Emerging Markets ETF – Down 9.3%
The underlying Invesco Strategic Emerging Markets Index measures the performance of high-quality, large-sized emerging market companies. It yields about 2.45% annually.
KraneShares MSCI One Belt One Road ETF (OBOR - Free Report) – Down 8.4%
The underlying MSCI Global China Infrastructure Exposure Index looks to identify potential beneficiaries of the One Belt One Road initiative based on how their geography, revenues and sector attributes align with the broad theme. Countries that may benefit from the OBOR initiative are the likes of China, Russia, Singapore, Malaysia and Israel.
Global X SuperDividend Emerging Markets ETF (SDEM - Free Report) – Down 8.4%
The underlying MSCI Emerging Markets Top 50 Dividend Index tracks the performance of 50 equally weighted companies that rank among the highest dividend-yielding equity securities in emerging markets. The fund yields 7.02% annually.
Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE - Free Report) – Down 8.3%
The underlying Russell RAFI Emerging Markets Large Company Index (Net) ranks companies on the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those whose fundamental scores are in the top 87.5% of the Russell Emerging Markets Index. It yields 3.77% annually.
WisdomTree Emerging Markets Equity Income Fund (DEM - Free Report) – Down 8.3%
The WisdomTree Emerging Markets High Dividend Index is a fundamentally weighted index that measures the performance of the highest dividend-yielding stocks selected from the WisdomTree Emerging Markets Dividend Index. The fund yields 5.21% annually.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>