Fed Rate Cut Bets Fuel Surge in Flows to Emerging-Market ETFs

Investors poured cash into exchange-traded funds that buy emerging market stocks and bonds for the fifth consecutive week, extending a multibillion dollar streak amid easing Middle East tensions and rising bets of Fed rate cuts this year.

The $95 billion iShares Core MSCI Emerging Markets ETF received over $1.2 billion in new cash last week alone, pushing its monthly inflow to $3.1 billion as of June 27. Its peer Vanguard FTSE Emerging Markets ETF, known as VWO, also stood out, recording $571 million of infloqa in that same period and heading for its biggest monthly gain since December 2021.