The iShares MSCI Emerging Market Index (ETF) ($EEM) is up sharply in trading today as investors’ sentiment has turned bullish on risk assets. However, the ETF has seen significant outflows according to the latest data.
According to data from ETF.com, EEM saw the second highest outflows for the week ended May 23, 2016. The reason for this is the possibility of a rate hike in the U.S. A rate hike in the U.S. is negative for emerging markets. Up until recently, market was anticipating, at the most, a single rate hike in 2016. But if the Fed does hike at its June meeting then it leaves the door open for a second rate later in the year.