Emerging markets should see more of the spotlight as value-seeking investors are attracted to cheaper stock prices and exchange traded funds (ETFs) with long-term growth aspects. Last September, Claymore launched the BRIC ETF (EEB), which is up 6% this year. Murray Coleman for MarketWatch.com looks at the individual countries that make up BRIC – Brazil, Russia, India and China – to reveal a glimpse into the future. Note that EEB is not equally divided between the four countries. Here is the breakdown: Brazil 46%, Russia 5%, India 13% and China 36%.
Brazil is benefiting from benign inflation, strong exports, and growth is expected in homebuilding, retail sales and infrastructure improvements. The individual ETF, iShares MSCI Brazil (EWZ) is up 19% year-to-date.
Russia has the best long-term prospect for growth even though political risk and dependency on gas and oil seem a hindrance. Russia currently relies on oil and gas for profits, which have provided the country with funds to improve infrastructure and their financial systems. Van Eck recently launched the first Russian ETF, Market Vectors Russia (RSX), to give investors the opportunity to participate in the country’s growth.
India has been performing well over the past few weeks. India’s economic growth is expected to be 7-8% annually for the next few years. And inflation and interest rate concerns are slowing. Barclays offers an Indian exchange traded note, iPath MSCI India (INP), which is up 5% this year.
China had 11% GDP growth in the first quarter of the year and growth continues to be strong based on domestic consumption. Since the pull back the end of February, China has come back. PowerShares broad market China ETF, Golden Dragon Halter USX China (PGJ) is up 9% for the year.
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.