Dallas, Texas 11/13/2013 (Financialstrend) – The iShares MSCI Emerging Markets Index (NYSE:EEM) exchange traded fund has been struggling to retain investor interest in its investment abilities geared to generate sustained and substantive returns from investment opportunities in the emerging markets sector. The fund has shed 5.4% of its market value in the past 30 days alone. This downcast sentiment of the stock has extended into this week too with the stock loosing ½ a percentage point value during trading yesterday.
With respect to dividend payouts to the iShares MSCI Emerging Markets Index (NYSE:EEM) fund has been found wanting. It has managed to payout dividend of $0.74 per share to its share holders in the past year; this translates to a 1.82% dividend yield over the past 12 months. This double whammy of depressed yields coupled with erosion in its market value is driving the investors away from the ETF.
The weak returns are a result of the continued mixed results that the emerging markets have shown over the past few quarters. While the fast growing economies of China, Brazil and India have spluttered or slowed down in fits and starts, the emerging markets continued dependency on export led growth is also being cited as a key reason that investors should consider before renewing their commitment to stay invested in the stock. Bloomberg in a hard hitting analysis has pointed out what it sees as a impending bubble destined to explode sooner rather than later. It has observed, “The impossibility of every nation being able to sell more than it buys means some of the analysts must be wrong,” It has given the examples of struggling industry majors like heavy earth movers manufacturer Caterpillar (CAT) and FMCG major Unilever (UL) to underline its analysis that exports only will not be able to sustain the growth of a company or a economy perpetually.