BRIC Countries No Longer A Favorite Of Emerging Markets Investors, Who Have Turned To Smaller Emerging Countries Experiencing Faster Growth

Monday, February 11, 2013 07:56
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BRIC Countries No Longer A Favorite Of Emerging Markets Investors, Who Have Turned To Smaller Emerging Countries Experiencing Faster Growth

Tags: China | U.S. economy | world economy

In the ten years ended in 2010, investments in the BRIC countries (Brazil, Russia, China, India) returned 484%.
 
Now, the emerging markets’ iconic group is falling off the radar. The largest emerging markets mutual funds have seen outflows in 46 of the last 47 weeks.

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And Google searches for BRICs fell to a seven-year low in December 2012.
 
The economies of the four nations have grown at their slowest pace since 2009 and the performance of the MSCI BRIC index has fallen behind global markets for the third consecutive year.
 
Even the man who came up with the BRIC moniker, Goldman Sachs asset management chair Jim O’Neill, is retiring.
 
Introduced in 2001, it was predicted that the economies of the BRIC nations would join the ranks of the US and Japan, then the world’s largest economies, by 2050.
 
During the next decade, the BRIC countries indeed outperformed, growing an average rate of 6.6% per year, almost twice as fast as the global economy.
 
Investors liked the moniker because it was simple and it denoted something solid—a brick. Now, investors are shifting their money into smaller emerging economies like Turkey and the Philippines.
 
Gross domestic product (GDP) for the BRIC nations is expected to have exceeded that of the global economy by only 1%, the narrowest since 1998.
 
Since the close of 2010, the MSCI BRIC index has lost 9.2%. It is up 2.2% so far in 2013 against a 4.3% increase in the global index.
 
The one exception is China, which surpassed the US in 2012 to become the world's largest trading nation based on the sum of its exports and imports. The assessment was made based on data from both nations.

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