As the investor’s high when it comes to Russia wears off, some are wondering if it might be time to bump it out of the BRICs – and their exchange traded funds (ETFs).
If Russia is not able to develop into a stable and mature economy, the country may get the boot from the BRICs: Brazil, Russia, India and China. Indonesia could be just the country to replace it.
Roben Farzad for BusinessWeek reports that investors are largely turned off by corruption in Russia, among other things. [Russia ETFs May Benefit From Modernization.]
On the other hand, Indonesia’s fiscal prudence, economic growth and strengthening social and political institutions have far more appeal. [BRIC ETFs Are Stealing the Show.]
Brad Reagan for The National notes that emerging markets are taking more precedence in investors’ portfolios, and now more than ever investors need to have the exposure to diversified emerging economies to capture growth and manage risk.
If nothing else, perhaps the BRICs can stand to take on another “I”. In the last three months, Market Vectors Indonesia (NYSEArca: IDX) and iShares MSCI Indonesia (NYSEArca: EIDO) are up about 13%, while BRIC funds are up about 10%. Russia ETFs are up about 13% in the same time period.
- SPDR S&P BRIC 40 ETF (NYSEArca: BIK)
- iShares MSCI BRIC Index (NYSEArca: BKF)
- Guggenheim BRIC (NYSEArca: EEB)
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.