South Korea ETFs Soaring Despite Looming VWO Sales
ETFs tracking South Korean equities are defying logic these days.
At this juncture, it looks like it is safe to say that the Vanguard-induced buying opportunity in South Korean stocks some investors were clamoring for in October will not materialize because, well, Vanguard is not going to induce it.
Nor has Vanguard's index change for VWO lead to upside for Brazilian and Chinese stocks even though the ETF will have higher allocations to those nations upon transitioning to the FTSE Emerging Markets Index. In fact, those are the FTSE's index's two largest country weights.
Yes, the iShares FTSE China 25 Index Fund (NYSEARCA:FXI) is up 5.3% since October 2, but that is more attributable to bullish Chinese economic data than Vanguard gobbling up Chinese stocks. Conversely, the iShares MSCI Brazil Index Fund (NYSEARCA:EWZ) has slid 5.6% over the same period, indicating that neither Vanguard nor any other fund company have been able to stem the tide of slumping Brazilian equities amid that country's slack economic growth.
Editor's Note: This content was originally published on Benzinga.com by The ETF Professor.
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