Sometimes, “better” is a relative term, but there is no denying the Vanguard Emerging Markets Stock Index Fd (NYSE: VWO), iShares MSCI Emerging Markets Indx (ETF) (NYSE: EEM) and other emerging markets exchange-traded funds are certainly acting better to start 2016 than they did in previous years.
This year, “better” for VWO and EEM, the two largest emerging markets ETFs, means a loss of 1.1 percent. Off their late January bottoms, VWO and EEM are up an average of 9 percent. That move underscores the notion that while the prominent bear case against emerging markets has not been extinguished, developing world equities have some near-term momentum.
Headwinds And Momentum
Those headwinds include eroding earnings, which have made emerging markets stocks appear inexpensive, capital outflows and the impact of higher U.S. interest rates and dollar-denominated emerging markets debt.
Still, recent momentum for emerging equities cannot be glossed over, particularly against the backdrop of weakness in China.
/www.benzinga.com/trading-ideas/long-ideas/16/03/6795979/near-term-momentum-for-emerging-markets-etfs alt=Near-Term Momentum For Emerging Markets ETFs>Full story available on Benzinga.com
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