MSCI BRIC

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The MSCI BRIC Equity Index was launched by MSCI Barra in December, 2005. The index currently consists of 229 constituents (as of January 31, 2007), and has history back to 30 December, 1994.[1]

The index is market capitalization weighted and combines the components of the MSCI Brazil, MSCI Russia, MSCI India and MSCI China Equity Indices.[2]

The acronym BRIC refers to the fast-growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and prominently used by Goldman Sachs in 2001.[3]

Exchange-traded funds[edit]

Investors can gain exposure to BRIC economies by investing in exchange-traded funds that track the MSCI BRIC index.

In September 2006, Claymore Securities introduced the Bank of New York BRIC ETF (NYSE ArcaEEB). In June 2007, the SPDR S&P BRIC 40 ETF (NYSE ArcaBIK) began trading and was seen as the first competitor to EEB. In November 2007, the third BRIC ETF hit the market when iShares launched the MSCI BRIC Index ETF (NYSE ArcaBKF).[4]

For Australian investors, iShares Australia has released the iShares MSCI BRIC ETF on the Australian Stock Exchange, which trade under the ticker symbol IBK.[5]

Investing[edit]

According to Money Management magazine, investing in BRIC countries can be highly profitable but risky. Principal Global Investors chief executive Grant Forster claims that investing in emerging markets can lead to sector biases, e.g. the Russian market has a 64 per cent exposure to the energy sector.[6]

References[edit]

  1. ^ http://www.menafn.net/updates/research_center/Global/Equity_val/MSCIJan07.pdf
  2. ^ http://www.msci.jp/eqb/pressreleases/archive/20051206_pr.pdf
  3. ^ http://www.economist.com/finance/displaystory.cfm?story_id=11075147
  4. ^ http://seekingalpha.com/article/55723-new-ishares-msci-bric-etf-is-best-of-breed
  5. ^ http://au.ishares.com/fund/fund_overview.do?t=IBK&e=ASX
  6. ^ http://www.moneymanagement.com.au/article/Emerging-Markets-Is-the-BRIC-fairytale-over/436456.aspx