This Week in Emerging Market Volatility – 6/14/2013

As of Friday the iShares MSCI Emerging Markets Index ETF (EEM – 39.31) was down 11.36% for 2013 and the iShares MSCI Brazil Capped Index (EWZ – 47.63) had lost 14.86%.  Despite these two markets underperforming for most of 2013 the respective volatility indexes stayed at relatively low levels.  My theory on this was that VXEEM and VXEWZ were focused on low volatility in the US markets as indicated by VIX.  With VIX starting to climb based on more uncertainty surrounding the US stock market VXEEM and VXEWZ have lifted to levels more accustomed to equity markets that are down over 10% on the year.