The mortgage fallout in the U.S. is beginning to take its toll on international markets, including the emerging markets that have delivered such stellar returns of late, Barron’s Online reports. That’s because investors are moving away from any investment they perceive as carrying risk.

The iShares MSCI Emerging Markets ETF was up nearly 50% year-to-date this year through October, versus a mere 6% for the S&P 500. But over the past few weeks, the fund has underperformed the S&P 500.

A comparison to a BRIC ETF shows that Brazil, Russia, India and China have delivered even stronger returns, with the Claymore BNY BRIC ETF up more than 80% year-to-date through October. But many note that Brazil has held up that sector, and gains there could soon give way if the correction many are predicting becomes a reality.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.