Emerging market exchange traded funds provide investors with access to the up-and-coming economies of the world, but most ETFs have a hefty weight to BRIC – Brazil, Russia, India, China – economies. Instead, investors can take a look at so-called beyond BRIC offerings that offer a more focused exposure to developing countries.
For instance, the EGShares Beyond BRICs ETF (NYSEArca: BBRC), which is up 7.8% year-to-date and broke to a new 52-week high Thursday, tries to reflect the performance of the FTSE Beyond BRICs Index. BBRC has a 0.58% expense ratio.
Due to its index methodology, BBRC includes exposure to emerging and frontier markets, excluding BRIC economies. Specifically, the ETF’s top country allocations include Mexico 16.1%, South Africa 15.9%, Malaysia 12.0%, Qatar 11.6%, Indonesia 8.6%, Nigeria 7.9%, Thailand 6.8%, Poland 4.9%, Turkey 3.9% and Chile 3.8%.
Just a couple of months after it debuted last year, BBRC transitioned to the FTSE Beyond BRICs Index in October, allowing the ETF to carry up to 25% frontier markets exposure. [Nigerian Opportunity for These ETFs]
“Beyond BRIC countries are becoming a more important force in the global economy, with a rising share of world equity market capitalization and a higher labor force growth rate than the BRICs and developed markets,” according to Emerging Global Advisors.
In contrast, the iShares MSCI Emerging Markets ETF (NYSEArca: EEM), which follows the benchmark MSCI Emerging Markets Index, includes China 17.4%, Brazil 11.0%, India 7.0% and Russia 5.4%.