BRIC Bash: BRIC ETFs Trouncing U.S. Stocks

There are three ETFs designed to be BRIC funds, none of which looked particularly enticing earlier this year. Not on reports of slowing Chinese growth or Brazil’s soaring inflation and scorched earth interest rate hiking campaign.

India’s plunging rupee and widening current account deficit did not make ETFs linked to Asia’s third-largest economy an attractive destination. The combination of Russia’s market volatility and its developed market growth rates did not send investors scurrying into one of the cheapest emerging markets. [One Good Chart: ETFs for Cheap Emerging Markets]

Fast-forward a few months and the BRIC ETFs are looking good. Really good, a situation we thought could materialize back in July. Over the past three months, the average return for the three BRIC ETFs is 14.7%, or about six times the returns offered by the S&P 500 over the same time. [BRIC ETF Rally Defies Slowing Economies, Social Unrest]

The “laggard” of the trio is the iShares MSCI BRIC ETF (NYSEArca: BKF) and why BKF is trailing its rivals is easy to put together: The ETF may allocate too much of its weight, 42.6%, to China. Over the past 90 days, the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) has been the top-performing coutry-specific fund offering access to one of the four BRIC nations.