BRIC ETFs Take a Beating in 2013

by on December 3, 2013 | ETFs Mentioned:

The story of 2013 has been one of soaring equity benchmarks smashing historical highs and raising the bar on a weekly basis. Investors have been cheering on developed equities all along the way, but the emerging market space has struggled to stay afloat. The SPDR S&P 500 ETF (SPY, A) has gained over 25% this year while the iShares MSCI Emerging Markets ETF (EEM, A-) has surrendered over 3%. The bulk of the struggles in the emerging market world stem from the BRIC nations, as the four rapidly-developing economies have floundered in 2013.

Brazil ETF Battered

The iShares MSCI Brazil Capped ETF (EWZ, A-) is by far the most popular and liquid ETF tracking the emerging economy, with more than $4.75 billion in total assets. While the fund has seen some impressive stretches since its debut in 2000, 2013 certainly will not be one of them. The ETF has been plagued by a large exodus of assets, as a number of investors have pulled capital from the fund.

On top of bleeding assets, the ETF has also had a poor performance on the year, giving up more than 12% of its share price.

Russia ETF Reeling

The Market Vectors Russia ETF (RSX, B+) is the benchmark Russia fund, with over $1 billion in assets and an average daily volume around 3.6 million shares. The fund has been a tough one to gauge over the years, as it lost 73% in its first calendar year (2008), only to jump 139% the following year. This year, RSX has failed to do much of anything as it has watched nearly $430 million in assets leave the fund.

Performance has been another issue for the fund. While it has managed to outpace a number of its emerging market peers, RSX is still down approximately 4% on the year.

India ETF Inferior

The India Earnings Fund (EPI, C+), the largest ETF wholly allocated to the emerging economy, was a disappointment in 2013. After suffering a rough 2011, EPI was able to recover in 2012 as investors had hopes that it would be able to continue its winning ways. The fund started off the year on the wrong foot, as it had several periods of heavy asset outflows. Though it has lost funds on the year, the last few months have seen more buyers than sellers for the fund, as investors may be trying to time out a bottom in the ETF.

EPI is the worst performer on this list, an interesting fact given that it has the lowest outflows of its BRIC peers.

China ETF Chained

The iShares China Large-Cap ETF (FXI, A) is, by far, the largest ETF dedicated to the Asian nation. China is usually the investor favorite out of the four BRIC nations. FXI has had an up and down year as far as asset flows are concerned, as it has seen huge sell-off periods, but also large buy-ins. Overall, the fund will end the year with far fewer assets than it started with, as it appears that the sellers easily trumped the buyers of the fund.

From a performance perspective, FXI has also been all over the board, struggling to determine a definitive direction until recent policy talks sent the fund soaring, allowing it to finally break even on the year.

Follow me on Twitter @JaredCummans.

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Disclosure: No positions at time of writing.