Bloomberg News

Emerging-Market ETF Declines Amid Global Manufacturing Slowdown

May 01, 2013

The exchange-traded fund (EEM:US) tracking developing-nation shares fell for the first time in three days as manufacturing from China to the U.S. and Australia slowed, sparking concern that the global economic recovery is faltering.

The iShares MSCI Emerging Markets Index dropped 0.9 percent to $42.91 at 12:13 p.m. in New York, after surging 2.5 percent in two days. The MSCI Emerging Markets Index lost 0.1 percent to 1,038.18. Stock exchanges in Latin America and most European markets were closed for a holiday. The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. slid 0.8 percent to 92.28, while the Standard & Poor’s 500 Index fell 0.4 percent after rising to a record yesterday.

“The economic data has been weak across the board,” Peter Jankovskis, who helps oversee $3 billion as co-chief investment officer of Lisle, Illinois-based Oakbrook Investments LLC, said by phone. The figures are “consistent with a slower growth horizon for the world, which would have negative implications for many emerging markets,” he said.

The ETF of developing nations followed American stocks lower as data showed that manufacturing in the U.S. expanded in April at the slowest pace in four months. The Institute for Supply Management’s factory index fell to 50.7 from the prior month’s 51.3. The median forecast of 84 economists surveyed by Bloomberg was 50.5. A reading of 50 is the dividing line between expansion and contraction.

China’s manufacturing expanded at a weaker pace in April in a sign that the slowdown in the world’s second-largest economy is extending into the second quarter. The Purchasing Managers’ Index was at 50.6, compared with the 50.7 median forecast of 31 analysts in a Bloomberg News survey and a March reading of 50.9. The Australian Industry Group said its manufacturing index plunged 7.7 points to 36.7 last month, a four year low.

The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, jumped 8.5 percent to 20.10.

To contact the reporter on this story: Julia Leite in New York at

To contact the editor responsible for this story: Emma O’Brien at

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Companies Mentioned

  • EEM
    (iShares MSCI Emerging Markets ETF)
    • $39.42 USD
    • 0.31
    • 0.79%
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