Investors in U.S. exchange-traded funds are pulling money out of emerging-market stocks, sending Vanguard Group’s $75 billion fund for the asset class into its longest streak of outflows since the pandemic selloff of 2020.

The Vanguard FTSE Emerging Markets ETF, whose biggest holding is chipmaker and artificial intelligence play Taiwan Semiconductor Manufacturing Co., saw net withdrawals for 10 straight days as of Wednesday. Investors yanked a total of $2.12 billion from the fund, often referred to by its ticker VWO. They also pulled capital out of BlackRock’s iShares funds that invest in EM equities. 

Sentiment on developing-nation equities remains impaired even after Monday’s slump was followed by the biggest two-day rally in nine months. The ETF outflows suggest a large buyer may be liquidating EM positions, according to Todd Sohn, ETF and technical strategist at Strategas Securities LLC in New York. 

“A larger holder of VWO is likely reducing exposure based on the persistent outflows over the last week,” Sohn said. “That’s usually suggestive of moving away from the asset class, perhaps not entirely, but at least bringing down the percentage they have within their asset allocation.”

Asian stocks have underperformed during the latest turbulence, with technology names such as TSMC hurt by doubts over whether significant AI investments will meet elevated expectations for returns. China’s patchy economic recovery and muted benefits from its stimulus are also weighing on the outlook.

The MSCI Emerging Markets Index fell 0.5% as of 10:05 a.m. in New York on Thursday after a 4.2% decline on Monday and a 3.3% rebound over the following two days. The gauge briefly breached its 200-day moving average this week for the first time since January, an indicator that many traders refer to in order to establish upward or downward trends and resistance levels.

Analysts, meanwhile, continue to raise their average estimates for 12-month profits for the MSCI index’s companies. The forecasts headed for a ninth week of increases, reaching the highest level in two years.

Options traders are also less pessimistic on EM equities than they are on U.S. stocks. The spread between Chicago Board Options Exchange gauges of implied volatility in EM and the U.S. fell to the lowest since March 2020 on Monday. 

This article was provided by Bloomberg News.