Emerging market ETFs feed boom-and-bust

While financial players are debating whether or not the Federal Reserve caused the run on emerging markets by tapering, there’s another group that should be implicated, writes John Authers in the Financial Times.

Read: New First Trust ETF offers European exposure

The fund management industry has been fickle in its support of emerging markets, he argues.

“The raw facts are that a remarkable amount of money has been pulled out of [emerging markets] with indecent haste; and that this was the first emerging market sell-off to be conducted mostly through ETFs,” he writes.

He also says there are structural flaws in the funds and how they track indices.

Read more here.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.