BBRC’s out-performance of BRIC-heavy emerging markets ETFs, though like EMBB the fund is down this year, is the byproduct of a familiar theme: Frontier markets outpacing their emerging counterparts. That trend started in earnest last year and has continued in 2014. [Frontier Markets Still Topping Emerging Rivals]
Eighteen countries are represented in BBRC and over a third are currently classified as frontier markets. Qatar, which will make the jump to emerging status in the second quarter, and Nigeria combine for 26.5% of BBRC’s country roster.
Frontier markets’ durability has worked to the advantage of BBRC in the current environment, but there are concerns frontier equities are richly valued and could eventually be permeated by the same volatility that investors have come to know with emerging stocks.
On the other hand, EMBB could rally if conservative emerging markets come back into favor. That is to say both ETFs have their pros and cons.
EMBB Country Weights