Do we detect a pattern? China, Russia and India dominate the year-to-date rankings in US dollar returns as measured by the most widely-traded US ETF’s. Latin America and Turkey are at the bottom.


There are a dozen reasons, to be sure, for the numbers to land this way. China is slowly correcting its overly-tight monetary policy (with 4% real short-term interest rates compared to negative short-term interest rates in every other major economy in the world). Russia has done a dead-cat bounce (the ETF RUS fell from just below $20 on July 9, 2014 to $10 on Dec. 15, before climbing back to $13 as of this morning. India is continuing a rally that began in 2013. Nonetheless, the value proposition in the Eurasian landmass became a great deal more compelling when most of the world jumped to join China’s new Asia Infrastructure Investment Bank. We’re waiting to see the first Silk Road ETF come over the horizon.

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