Hi! In this week\u2019s ETF Wrap, you\u2019ll get see how international stocks, including in emerging markets, stack up against U.S. equities in the third quarter.<\/p>\n
Please send feedback and tips to christine.idzelis@marketwatch.com or isabel.wang@marketwatch.com. You can also follow me on Twitter at\u00a0@cidzelis<\/a>\u00a0and find me on\u00a0LinkedIn. Isabel Wang is on Twitter at\u00a0@Isabelxwang<\/a>.<\/p>\n Sign up\u00a0<\/strong>here<\/strong>\u00a0for our weekly ETF Wrap.<\/strong><\/p>\n The U.S. stock market, as measured by the S&P 500 index, is outperforming global equities in the third quarter despite a rough September, as the index faces its worst quarterly performance in a year with just one trading day left in the three-month period.<\/p>\n The iShares MSCI ACWI ex U.S. ETF The SPDR S&P 500 ETF Trust Third-quarter trading will wrap up Friday after what\u2019s been a volatile month for markets. A surge in Treasury bond yields has hurt stocks as investor worry over the Federal Reserve keeping interest rates higher for longer.<\/p>\n Meanwhile, an ailing property sector and slowing growth in China, the world\u2019s second largest economy after the U.S., is worrying investors who have been disappointed by its stimulus efforts. Chinese equities have weighed on the performance of emerging-markets stocks broadly.\u00a0<\/p>\n The iShares MSCI Emerging Markets ETF \u201cDemographics is destiny for emerging markets,\u201d said Perth Tolle, founder of Life + Liberty Indexes, in an interview, but for China, \u201cdemographics is a time bomb that is now going off.\u201d<\/p>\n Read:<\/strong> China reports first population drop in decades as birthrates plunge<\/p>\n China is by far the biggest weight in the iShares MSCI Emerging Markets ETF Kristy Akullian, senior iShares investment strategist at BlackRock, said by phone that China is struggling with high youth unemployment and property-sector woes. <\/p>\n While investors\u2019 expectations for the country were \u201creally high coming into this year\u201d because of the post-pandemic reopening of its economy, there\u2019s now concern over slowing economic growth there, she said.<\/p>\n See:<\/strong> China-focused ETFs fall after country\u2019s growth disappoints, deepening 2023 losses<\/p>\n China is \u201csuch a big part of the EM index\u201d that some investors may want to separate it out from their emerging-market exposure, said Akullian. One way to do that is through the iShares MSCI Emerging Markets ex China ETF The iShares MSCI India ETF For a longer-term investment strategy in international equities, stocks in India stand to benefit from \u201cmegaforces\u201d tied to demographics as the country has a much younger population and larger workforce compared with other countries in emerging markets, according to Akullian.<\/p>\n Tolle said that she is personally \u201cbullish\u201d on India as a result of its demographics and described the population as highly educated, but also has conflicting feelings about the country when viewed through a lens of freedom. From that investing perspective, India has been \u201cborderline\u201d in the past in terms of potentially making the grade for her Freedom 100 Emerging Markets ETF.<\/p>\n The ETF, which launched in 2019 and seeks to invest in countries with higher personal and economic freedom scores, currently excludes India as well as autocracies like China.<\/p>\n The Freedom 100 Emerging Markets ETF So far in 2023, the fund is beating the iShares MSCI Emerging Markets ETF, which has eked out a gain of about 0.1% for the year through Thursday.<\/p>\n As for U.S. stocks, the SPDR S&P 500 ETF Trust remains up around 12% so far this year, while global equities excluding the country have trailed, with the iShares MSCI ACWI ex U.S. ETF posting a year-to-date gain of 3.5% over the same period.\u00a0<\/p>\n As usual, here\u2019s your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data.<\/p>\n
\n ACWX,<\/span>
\n which tracks international stocks while excluding the U.S., is down 4.3% this quarter through Thursday on track for its first quarterly loss since the third quarter of 2022, FactSet data show. <\/p>\n
\n SPY
\n is also heading for potentially its first quarterly drop since the same period, with a drop of 3.3% so far in the third quarter.<\/p>\n
\n EEM
\n is down 4.2% so far this quarter, trailing the S&P 500 index
\n SPX,<\/span>
\n while faring a bit better than developed market equities in Europe, Australia and the Far East as tracked by iShares MSCI EAFE ETF
\n EFA,<\/span>
\n according to FactSet data on Thursday afternoon.<\/p>\n
\n EEM,<\/span>
\n representing almost 30% of its portfolio as of Sept. 27, followed by India at nearly 16% and then Taiwan at almost 15%, according to the fund\u2019s data on BlackRock\u2019s website.\u00a0<\/p>\n
\n EMXC,<\/span>
\n which is down 3.9% so far this quarter. The fund has benefited from its exposure to India, the country making up the largest portion of its portfolio as of Sept. 27.<\/p>\n
\n INDA
\n is in positive territory so far in the third quarter, up slightly more than 1%, according to FactSet data.\u00a0\u00a0<\/p>\nMeasuring freedom<\/h4>\n
\n FRDM,<\/span>
\n whose top holdings include Taiwan, South Korea, Chile and\u00a0 Poland, is down 10% in the third quarter, bringing its year-to-date gains to 2.3%, according to FactSet data.<\/p>\nThe good\u2026<\/h2>\n
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\n \n Top Performers<\/strong><\/p>\n<\/td>\n \n %Performance<\/strong><\/p>\n<\/td>\n<\/tr>\n \n \n Sprott Uranium Miners ETF
\n URNM<\/p>\n<\/td>\n\n 7.7<\/p>\n<\/td>\n<\/tr>\n \n \n Global X Uranium ETF
\n URA\n <\/td>\n\n 4.9<\/p>\n<\/td>\n<\/tr>\n \n \n VanEck Oil Services ETF
\n OIH\n <\/td>\n\n 4.2<\/p>\n<\/td>\n<\/tr>\n \n \n First Trust Natural Gas ETF
\n FCG\n <\/td>\n\n 4.2<\/p>\n<\/td>\n<\/tr>\n \n \n SPDR S&P Oil & Gas Exploration & Production ETF
\n XOP\n <\/td>\n\n 4.1<\/p>\n<\/td>\n<\/tr>\n \n \n Source: FactSet data through Wednesday, Sept. 27. Start date Sept. 21. Excludes ETNs and leveraged products. Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater<\/p>\n<\/td>\n \n <\/td>\n<\/tr>\n<\/table>\n \u2026and the bad<\/h2>\n
\n
\n \n Bottom Performers<\/strong><\/p>\n<\/td>\n \n %Performance<\/strong><\/p>\n<\/td>\n<\/tr>\n \n \n VanEck Vietnam ETF
\n VNM\n <\/td>\n\n -7.4<\/p>\n<\/td>\n<\/tr>\n \n \n VanEck Gold Miners ETF
\n GDX\n <\/td>\n\n -6.9<\/p>\n<\/td>\n<\/tr>\n \n \n VanEck Junior Gold Miners ETF
\n GDXJ<\/p>\n<\/td>\n\n -6.3<\/p>\n<\/td>\n<\/tr>\n \n \n ETFMG Prime Junior Silver Miners ETF
\n SILJ\n <\/td>\n\n -6.2<\/p>\n<\/td>\n<\/tr>\n \n \n Global X Silver Miners ETF
\n SIL\n <\/td>\n\n -6.2<\/p>\n<\/td>\n<\/tr>\n \n \n Source: FactSet data <\/p>\n<\/td>\n \n <\/td>\n<\/tr>\n<\/table>\n New ETFs<\/h2>\n
\n
\n ASIA,<\/span>
\n Matthews India Active ETF
\n INDE,<\/span>
\n Matthews Japan Active ETF
\n JPAN,<\/span>
\n and Matthews Asia Dividend Active ETF
\n ADVE
\n and Matthews Emerging Markets Sustainable Future Active ETF
\n EMSF.<\/span><\/p>\n<\/li>\nWeekly ETF reads<\/h2>\n<\/p><\/div>\n