Reviewed by Aug 26, 2020| Updated on
BRIC ETF is represented by the stocks of the BRIC countries. BRIC ETF derives its value from the listed securities belonging to the BRIC countries, i.e. Brazil, India, Russia and China.
BRIC ETF may be based on the securities of all the BRIC nations or may be based on the securities of any one or more of the BRIC countries. An investor in these ETFs would have an opportunity to benefit from the growing economies.
The BRIC ETF fund may buy either the securities of all the four countries or any one of them.
Understanding BRIC ETF
- BRIC countries are developing economies. An investor who wishes to tap into the growth potential of the developing economies can invest in BRIC ETF.
- BRIC ETFs offer diversified exposure to securities of different economies.
- BRIC ETFs may invest in local companies or in stocks listed in international stock exchanges.
- BRIC countries have been most sought investments due to the large market and availability of labour.
- BRIC ETFs are similar to the ETFs focussed on the US and Europe. However, they carry high expense ratios due to the high cost of living. Also, BRIC ETFs invest in funds and stocks trading in other countries.
- The BRIC countries have had a high GDP growth in the past few decades, and have been considered amongst the emerging economies of the world. BRIC countries have been a popular investment destination in the past few decades. However, once the initial popularity of the BRIC countries waned down, the BRIC countries were considered individually for growth prospects.
- Many global investors have set up companies and manufacturing facilities to tap the large markets and make use of the various factors of production. The BRIC economies have traditionally had low-cost labour and scope for industrial development.
- The potential of high growth has waned out in recent times. The other south-east Asian economies are favoured off late.