Exchange traded funds tracking emerging market stocks led Wednesday’s decliners as the category’s ETFs were in danger of setting fresh 52-week lows.
The underperformance of emerging markets relative to the S&P 500 recently suggests investors are avoiding riskier sectors due to Europe’s incessant debt turmoil.
Emerging-market stocks fell as China signaled it shouldn’t be expected to bail out the global economy, Bloomberg reported.
Chinese Premier Wen Jiabao said developed countries “must first put their own houses in order” and not rely on bailouts from his nation amid increasing speculation Greece will default, according to the report.
The iShares MSCI Emerging Markets was down about 15% year to date heading into Wednesday’s action.
Its slide versus the S&P 500 has accelerated lately, as the second chart shows.
iShares MSCI Emerging Markets ETF (EEM)
click to enlarge