The so-called BRIC countries and exchange traded funds (ETFs) were stars in 2007, but now most of those regions are finding themselves feeling a little off.
Over the past month, the S&P 500 SPDR (SPY) has outperformed every BRIC (Brazil, Russia, India and China) -focused ETF, except India, and all of the fallen countries have shown just how risky they can be.
Carl Delfeld for ETF XRAY reports that the S&P 500 has fallen 12% year-to-date, while Brazil is down 10%, Russia is down 18&, India is down about 37% and China is off by about 28%.
In the last month, though, India has been a stellar performer and is the only BRIC country putting up positive numbers.
What is interesting is that these resource rich countries were riding high, and now the fall of commodity prices has shot them down. This type of volatility is what investing abroad can entail, but the reward can also be worth it.
The flexible and ever-present U.S. economy has taken hits from high energy prices, mortgage meltdowns, and credit tightening in stride. So the U.S. dollar may be ready to set new records and begin its climb back up after a long three years.
Broad BRIC ETFs include:
- iShares MSCI BRIC Index Fund (BKF): down 25% year-to-date; Brazil, 34.6%; China, 31.5%; India, 12.6%; Russia, 11.7%
- SPDR S&P BRIC 40 (BIK): down 20.8% year-to-date; China, 38.4%; Brazil, 27.3%; Russia, 17%; India, 5.6%
- Claymore/BNY BRIC (EEB): down 20.7% year-to-date; Brazil, 57.8%; China, 18.2%; India, 7.6%; Russia, 5%
Single-country BRICs include:
- Market Vectors Russia ETF (RSX): down 17.9% year-to-date
- iShares MSCI Brazil Index (EWZ): down 9.6% year-to-date
- PowerShares India (PIN): down 15.5% since March 5 inception
- WisdomTree India Earnings (EPI): down 21.4% since Feb. 26 inception
- iShares FTSE/Xinhua China 25 Index (FXI): down 26.9% year-to-date
- SPDR S&P China (GXC): down 31.3% year-to-date
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.