Thus far, the trend in investor interest has been shifting from developed countries to increasingly narrow emerging market investments.
The iShares MSCI-EAFE ETF (EFA), a fund that tracks established countries in Europe as well as Japan, saw net outflows of $1 billion in 2008 and $4 billion as of Nov. 30, 2009, according to recent data from the National Stock Exchange.
iShares MSCI Japan (EWJ), a more specific, developed market ETF, had net outflows of $1.7 billion of 2008, and is set to have net outflows of at least $1 billion in 2009.While EFA and EWJ are still among the largest and most liquid ETFs trading today, the trend in international investing has markedly shifted towards broad-based emerging market funds. According to data from the National Stock Exchange, two out of the top 10 largest ETFs --measured by total assets -- are broad-based emerging market funds . The larger of the two, the iShares MSCI-Emerging Markets ETF (EEM), was launched in April of 2003, and had $37.3 billion in assets as of Nov. 30, 2009. Vanguard's MSCI Emerging Markets ETF (VWO), launched in March of 2005, had more than $17.6 billion in assets as of Nov. 30. While assets have flowed out of EFA and EWJ, net assets have increased dramatically for EEM and VWO. During 2008, EEM had a net cash flow of $2.3 billion while VWO had a net cash flow of $3.3 billion. Year to date in 2009, EEM's net cash flow has been $4 billion, while VWO has attracted a net cash flow of more than $7.7 billion.
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