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March 12, 2022, 10:04 a.m. EST

As Russia’s Ukraine invasion roils global stock markets, is China the next big worry for ETF investors?

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By Mark DeCambre

Russia’s invasion of Ukraine is entering its third week and many of the equity indexes covering investments in Moscow are closed indefinitely. The Wall Street Journal reported that MSCI Inc. /zigman2/quotes/202905332/composite MSCI +0.52% and other index providers removed Russian stocks from their global benchmarks this week, following sanctions imposed by the U.S. and other nations in response to the Kremlin’s offensive in Eastern Europe.

Exchange-traded fund behemoths, the iShares Core MSCI Emerging Markets ETF /zigman2/quotes/201783445/composite IEMG -0.30% and iShares MSCI Emerging Markets ETF /zigman2/quotes/201454250/composite EEM -0.40% removed all Russian stocks from their funds effective on Wednesday.

But is there another even bigger concern, lurking out there for emerging market investors, as the geopolitical situation in Ukraine unfolds? Some experts are pointing to China as a potential problem and we spoke to Perth Tolle, founder of the Freedom 100 Emerging Markets ETF, to talk strategy.

Send tips, or feedback, and find me on Twitter at  @mdecambre  or  LinkedIn  to tell us what you think are important topics for  ETF Wrap .

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The good

Best Performers %Performance
Aberdeen Standard Physical Palladium /zigman2/quotes/202108695/composite PALL 18.2
VanEck Oil Services ETF /zigman2/quotes/207596637/composite OIH 15.2
U.S. Oil Fund LP /zigman2/quotes/203483736/composite USO 13.3
First Trust Global Tactical Commodity Strategy Fund /zigman2/quotes/207775995/composite FTGC 11.9
iShares GSCI Commodity Strategy Fund /zigman2/quotes/208581139/composite COMT 11.9

…and the bad

Worst Performers
ARK Fintech Innovation ETF /zigman2/quotes/205650811/composite ARKF -17.0
KraneShares CSI China Internet ETF /zigman2/quotes/205873167/composite KWEB -14.7
U.S. Global Jets ETF /zigman2/quotes/207744796/composite JETS -14.6
ARK Next Generation Internet ETF /zigman2/quotes/201846852/composite ARKW -14.2
ARK Innovation ETF /zigman2/quotes/204808965/composite ARKK -13.2

Top inflows

SPDR S&P 500 ETF Trust /zigman2/quotes/209901640/composite SPY
Invesco QQQ Trust /zigman2/quotes/208575548/composite QQQ
SPDR Gold Shares /zigman2/quotes/200593176/composite GLD
iShares 7-10 Year Treasury Bond ETF /zigman2/quotes/202862654/composite IEF
Vanguard Total Stock Market ETF /zigman2/quotes/202677318/composite VTI

…outflows

Weekly outflows
iShares iBoxx $ Investment Grade Corporate Bond ETF /zigman2/quotes/206919681/composite LQD
Financial Select Sector SPDR Fund /zigman2/quotes/209660484/composite XLF
iShares U.S. Real Estate ETF /zigman2/quotes/202389641/composite IYR
Invesco KBW Bank ETF /zigman2/quotes/202716924/composite KBWB
iShares iBoxx $ High Yield Corporate Bond ETF /zigman2/quotes/204471305/composite HYG

China risk

Earlier this week, MarketWatch’s sister publication, Investor’s Business Daily, wrote that investors rocked by developments in Russia, with an almost daily stream of Western companies suspending activity from the country, shouldn’t forget China. “Nearly 15 major companies in the S&P 500, including information technologyfirm Texas Instruments /zigman2/quotes/202237907/composite TXN -0.90% and Applied Materials /zigman2/quotes/209393259/composite AMAT -3.24% plus Tesla /zigman2/quotes/203558040/composite TSLA -1.79% , report getting a quarter or more of their revenue from China,” wrote IBD.

And China’s ties to Russia may present itself as a possible issue for investors buying China-related assets or who have exposures to funds linked to Beijing. IBD noted that ETF exposure to China is in “orders of magnitude greater thanRussia ever was.”

For example, China accounts for around 33% of the aforementioned iShares MSCI Emerging Markets ETF, which boasts $26 billion in assets, while the iShares Core MSCI Emerging Markets, with $68 billion in assets, holds 31% of its assets linked to mainland China.

What’s the concern with China?

/zigman2/quotes/202905332/composite
US : U.S.: NYSE
$ 415.26
+2.14 +0.52%
Volume: 373,429
June 29, 2022 4:03p
P/E Ratio
45.56
Dividend Yield
1.00%
Market Cap
$33.51 billion
Rev. per Employee
$584,934
loading...
/zigman2/quotes/201783445/composite
US : U.S.: NYSE Arca
$ 49.30
-0.15 -0.30%
Volume: 15.55M
June 29, 2022 4:00p
loading...
/zigman2/quotes/201454250/composite
US : U.S.: NYSE Arca
$ 40.29
-0.16 -0.40%
Volume: 33.97M
June 29, 2022 4:00p
loading...
/zigman2/quotes/202108695/composite
US : U.S.: NYSE Arca
$ 182.70
+8.47 +4.86%
Volume: 39,881
June 29, 2022 4:00p
loading...
/zigman2/quotes/207596637/composite
US : U.S.: NYSE Arca
$ 238.29
-4.33 -1.78%
Volume: 625,838
June 29, 2022 4:00p
loading...
/zigman2/quotes/203483736/composite
US : U.S.: NYSE Arca
$ 82.95
-1.77 -2.09%
Volume: 4.62M
June 29, 2022 4:00p
loading...
/zigman2/quotes/207775995/composite
US : U.S.: Nasdaq
$ 27.45
-0.19 -0.69%
Volume: 659,354
June 29, 2022 4:15p
loading...
/zigman2/quotes/208581139/composite
US : U.S.: Nasdaq
$ 41.96
-0.58 -1.36%
Volume: 550,908
June 29, 2022 4:15p
loading...
/zigman2/quotes/205650811/composite
US : U.S.: NYSE Arca
$ 16.19
-0.33 -2.00%
Volume: 1.05M
June 29, 2022 4:00p
loading...
/zigman2/quotes/205873167/composite
US : U.S.: NYSE Arca
$ 32.97
-0.36 -1.08%
Volume: 16.40M
June 29, 2022 4:00p
loading...
/zigman2/quotes/207744796/composite
US : U.S.: NYSE Arca
$ 16.68
-0.25 -1.48%
Volume: 5.32M
June 29, 2022 4:00p
loading...
/zigman2/quotes/201846852/composite
US : U.S.: NYSE Arca
$ 51.30
-0.80 -1.54%
Volume: 791,129
June 29, 2022 4:00p
loading...
/zigman2/quotes/204808965/composite
US : U.S.: NYSE Arca
$ 41.51
-0.66 -1.57%
Volume: 19.88M
June 29, 2022 4:00p
loading...
/zigman2/quotes/209901640/composite
US : U.S.: NYSE Arca
$ 380.34
-0.31 -0.08%
Volume: 65.68M
June 29, 2022 4:00p
loading...
/zigman2/quotes/208575548/composite
US : U.S.: Nasdaq
$ 283.80
+0.26 +0.09%
Volume: 57.30M
June 29, 2022 4:15p
loading...
/zigman2/quotes/200593176/composite
US : U.S.: NYSE Arca
$ 169.49
-0.13 -0.08%
Volume: 4.79M
June 29, 2022 4:00p
loading...
/zigman2/quotes/202862654/composite
US : U.S.: Nasdaq
$ 101.52
+0.81 +0.80%
Volume: 3.56M
June 29, 2022 4:15p
loading...
/zigman2/quotes/202677318/composite
US : U.S.: NYSE Arca
$ 190.26
-0.32 -0.17%
Volume: 4.16M
June 29, 2022 4:00p
loading...
/zigman2/quotes/206919681/composite
US : U.S.: NYSE Arca
$ 109.70
+0.65 +0.60%
Volume: 10.75M
June 29, 2022 4:00p
loading...
/zigman2/quotes/209660484/composite
US : U.S.: NYSE Arca
$ 31.73
-0.18 -0.56%
Volume: 64.51M
June 29, 2022 4:00p
loading...
/zigman2/quotes/202389641/composite
US : U.S.: NYSE Arca
$ 92.16
-0.56 -0.60%
Volume: 5.28M
June 29, 2022 4:00p
loading...
/zigman2/quotes/202716924/composite
US : U.S.: Nasdaq
$ 52.58
-0.51 -0.96%
Volume: 348,034
June 29, 2022 4:15p
loading...
/zigman2/quotes/204471305/composite
US : U.S.: NYSE Arca
$ 73.65
-0.11 -0.15%
Volume: 36.81M
June 29, 2022 4:00p
loading...
/zigman2/quotes/202237907/composite
US : U.S.: Nasdaq
$ 152.78
-1.38 -0.90%
Volume: 4.35M
June 29, 2022 4:00p
P/E Ratio
17.47
Dividend Yield
3.01%
Market Cap
$142.16 billion
Rev. per Employee
$611,613
loading...
/zigman2/quotes/209393259/composite
US : U.S.: Nasdaq
$ 91.94
-3.08 -3.24%
Volume: 7.57M
June 29, 2022 4:00p
P/E Ratio
12.27
Dividend Yield
1.13%
Market Cap
$82.66 billion
Rev. per Employee
$918,481
loading...
/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 685.47
-12.52 -1.79%
Volume: 27.63M
June 29, 2022 4:00p
P/E Ratio
93.01
Dividend Yield
N/A
Market Cap
$723.12 billion
Rev. per Employee
$626,347
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