The BRIC – Brazil, Russia, India and China – economies are established players in the emerging markets, but investors who want exposure to other potential rising stars in the space can consider exchange traded funds that specifically target beyond the BRICs.
While the BRIC nations maintain dominant positions in a many emerging markets ETFs, the equity markets in those countries, Brazil in particular, have struggled this year. Moreover, Russia is experiencing terminal population declines and loss of economic influence as the U.S. ramps up oil and gas production, writes Charles Sizemore for Forbes.
The large allocations to the BRIC countries, Taiwan and South Korea in some diversified developing world ETFs has prompted investors to consider other emerging markets. [State Street’s Beyond BRIC ETF Goes Live]
By focusing solely on the BRICs, investors are missing out on investment opportunities in rising emerging countries, like Mexico, Turkey, Indonesia and South Africa, Sizemore points out.
ETF investors, though, can now segment the emerging market space, with two so-called beyond BRIC ETFs: EGShares Beyond BRICs (NYSEArca: BBRC) and SPDR MSCI Beyond BRIC ETF (NYSEArca: EMBB).
BBRC tries to reflect the performance of the FTSE Beyond BRICs Index, which has about 75% exposure to companies in more developed emerging markets (excluding Brazil, Russia, India, China, Argentina and Taiwan) and 25% exposure to companies in frontier markets, which are less developed. BBRC has a 0.58% net expense ratio. [Beyond BRICs ETF Transitions to New Index]