Exit the dragon: MSCI EM ex-China assets top $11 bn as pessimism grows

India stands to benefit most from increasing flows into index excluding China

Once considered an emerging market (EM) darling, China is now facing ostracism from the EM basket due to a prolonged spell of poor returns, an uncertain economic outlook, and geopolitical hostilities.

The assets of a popular EM-focused exchange-traded fund (ETF) excluding China (ex-China), issued by BlackRock (iShares EM ex-China), have exceeded $11 billion this month, marking a twenty-two-fold increase from less than $500 million three years ago.
 

Market watchers note that an increasing number of passive investors, particularly from the US and Europe, are reallocating their investments to ETFs that exclude China.
 

India stands to gain the most from this