In a shift reflecting evolving investor sentiment, BlackRock Inc (NYSE:).’s iShares MSCI Emerging Markets ETF (NYSE:), known as EEM, has seen substantial outflows since July, with the fund’s assets falling to their lowest level since 2009. The fund, once a standard for broad emerging-market exposure, has experienced an exodus of $5.4 billion over the past few months, including a significant $1.5 billion withdrawal this week.
The outflow has been attributed to worsening risk sentiment in the markets. Coupled with an equity selloff, the fund’s assets have diminished drastically to $17 billion from $53 billion a decade ago.
Morningstar analysts offered insights into this trend. They suggested that investors are now seeking more targeted opportunities and funds that focus on smaller, newer companies. This shift is evident in the growing preference for funds like BlackRock’s iShares Core MSCI EM ETF over the traditional EEM.
BlackRock Inc., a pioneer in passive investing within the asset class of exchange-traded funds (ETFs) focused on emerging-market equities, is witnessing these substantial shifts firsthand. The company’s experience underscores the dynamic nature of the investment landscape and the need for financial institutions to adapt to changing investor preferences.
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