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Will 2013 be the Year of the BRIC ETF?


Some prominent Wall Street analysts are calling for so-called BRIC nations to outperform the U.S. in 2013 to reverse this year’s trend with the S&P 500 doubling the performance of the emerging market ETFs.

The iShares MSCI BRIC Index Fund (BKF) is up 7.5% this year while the SPDR S&P 500 ETF (SPY) has gained 15%, according to Morningstar.

In its 2013 outlook, Goldman Sachs (GS) tells investors to bet on BRICs over U.S. stocks, reports Joe Weisenthal for Business Insider.

“One of the big themes of 2012 has been the outperformance of US exposure vs. foreign exposure. Now Goldman sees this reversing. Growth is expected to bounce back, and Goldman is above consensus in its BRICs growth estimates,” Weisenthal writes. “And Goldman isn’t alone. In BofA/ML’s equity outlook, it also sees a return to over-performance among companies with foreign exposure.”

BRIC is an acronym actually coined by Goldman Sachs referring to the emerging economies of Brazil, Russia, India and China.

Guggenheim BRIC ETF (EEB) and SPDR S&P BRIC 40 ETF (BIK) are other ETFs covering the group.

Purchasing Managers Index, or PMI, data coming out of these four countries is pointing to stronger economic growth as the fiscal cliff looms in the U.S., Business Insider adds.

Within the individual BRIC nations, ETFs indexed to China and Brazil have been hot seller the past few months. [BRIC ETFs: Investors Jump Into China and Brazil]

Combined, the GDP of the BRICs nearly equals the U.S., Foreign Policy magazine reports. “Together, they make up 40 percent of the world’s population, 25 percent of the world’s landmass, and about 20 percent of global GDP. They already control some 43 percent of global foreign exchange reserves, and their share keeps rising,” it adds.

iShares MSCI BRIC Index Fund

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.