"EEM has had a strong trailing year. The fund is up 32.81% over the past 12 months, though momentum has stalled sharply in recent weeks with the fund dropping sharply in the week ending March 6, 2026. The pullback reflects a broader shift in investor sentiment rather than any fund-specific issue."
"Emerging market assets are priced in local currencies but held by global investors who think in dollars. When the U.S. dollar strengthens, EM assets lose value in dollar terms when converted back, and the cost of dollar-denominated debt carried by many EM governments and companies rises."
"The VIX fear gauge climbed to 23.75 as of March 5, 2026 - up 31.9% over the prior month - signaling that investors are actively repricing risk away from higher-volatility assets. EEM bore the brunt of that rotation - EEM dropped 8.41% in the week ending March 6, 2026."
EEM, the iShares MSCI Emerging Markets ETF, delivered strong 12-month returns of 32.81% but experienced sharp volatility with an 8.41% decline in the week ending March 6, 2026. This pullback resulted from rising market anxiety, with the VIX fear gauge climbing 31.9% to 23.75, signaling investor rotation away from higher-volatility assets. Emerging markets experience more acute risk repricing than developed markets. The U.S. dollar direction significantly impacts EEM performance, as emerging market assets priced in local currencies lose value when the dollar strengthens, while also increasing dollar-denominated debt costs for EM governments and companies. A weakening dollar historically provides tailwinds for emerging market funds.
Read at 24/7 Wall St.
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