A recent paper studied investor flow into and out of emerging market ETFs and found they amplified global risks and ignored local conditions unlike market indexes and and mutual funds which did not.
I recommend reading the paper, because it suggests to me that investors ignore what is going on with the actual holdings of the ETF within a more comprehensive macroeconomic assessment. This exposes those local markets to an exaggerated global financial risk and increases market volatility.
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Sunday, March 25, 2018
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