This Week in Emerging Market Volatility – 3/7/2014

The emerging market space took a hit early in the week as the Russia weighting of just over 5% led to a drag in performance for the iShares MSCI Emerging Markets ETF (EEM – 39.52).  Out of curiosity I checked out the country weightings for EEM on the iShares website.  The weightings for the top 10 countries in the index appear in the table below.

EEM Weightings

Monday VXEEM was higher by as much as 15% before finishing the week slightly higher as tensions eased and EEM recovered.  The story continues to be mixed as far as Brazil goes.  The iShares Brazil Capped ETF (EWZ – 40.32) was down 1.63% on the week and VXEWZ was dramatically higher based on a wide variety of factors.  The VXEWZ futures are at a pretty significant discount to the index which may mean the time for VXEWZ in the low 30’s is not expected to be extensive.