How Have Your BRICS Investments Fared in 2015 So Far?

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How Have Your BRICS Investments Fared in 2015 So Far? PART 1 OF 7

BRICS and Your Investments

BRIC turns to BRICS

The acronym BRIC was coined by Jim O’Neill of Goldman Sachs in 2001. It stood for Brazil, Russia, India, and China, which were identified as the economic powerhouses of the future.

In 2010, BRIC became BRICS with the addition of South Africa to this international economic entity. The expanded BRICS economies represent nations from most continents: Brazil from the Americas, specifically South America; Russia from Europe; India and China from Asia; and the most recently added South Africa from Africa.

BRICS and Your Investments

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Your investment in BRICS

Knowingly, or unknowingly, you may have invested a portion of your money in the BRICS economies. Diversified ETFs like the iShares MSCI Emerging Markets ETF (EEM) and the Vanguard FTSE Emerging Markets ETF (VWO) invest a portion of their portfolios in some of these economies.

In this series, we will do a performance analysis of how 2015 has been for investments focused toward these geographies, highlighting the sectors that have impacted their performance until August 24, 2015.

BRIC composition

Two ETFs specifically invest in stocks of BRIC nations: the iShares MSCI BRIC ETF (BKF) and the Guggenheim BRIC ETF (EEB). These ETFs invest in companies like China Mobile Limited (CHL), Infosys Limited (INFY), Itaú Unibanco Holding S.A. (ITUB), and Open Joint Stock Company Gazprom (OGZPY).

While the EEB is overweight on Brazilian and Russian equities compared to BKY, BKY is overweight on Asian stocks. The geographic exposure shown in the above graph is an average exposure to these geographies year-to-date until August 24.

This portfolio allocation has shaped the performance of these ETFs, which we’ll explore in the next article.


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