As the slowdown persists, BRIC economies will see less foreign direct investment from the United States. This will happen as U.S. investing sentiment has taken a hit because of the sub-prime credit crisis and defaults in sub-prime mortgages.
However, the BRIC economies do have a couple factors which will offset their vulnerability to a slowdown in the U.S. economy. All of these countries have shown strong growth in domestic consumption. This allows for all of these countries to remain somewhat self-sufficient and creates both domestic investment and demand.
Some ETFs covering each of the BRIC economies individually include:
- Market Vectors Russia ETF (RSX), down 17% year-to-date.
- iShares MSCI Brazil Index (EWZ), down 5.3% year-to-date.
- PowerShares India (PIN), down 15.3% since March 5 inception
- WisdomTree India Earnings (EPI), down 21.3% since Feb. 26 inception
- iShares FTSE/Xinhua China 25 Index (FXI), down 23.9% year-to-date
- SPDR S&P China (GXC), down 27.8% year-to-date
Some broad-based BRIC ETFs include:
- SPDR S&P BRIC 40 (BIK), down 17.8% year-to-date.
- iShares MSCI BRIC Index (BKF), down 22.5% year-to-date
- Claymore/BNY BRIC (EEB), down 18.1% year-to-date
