Is BRIC still a thing?


#1

Should I be looking at BRIC investments? anyone followed that grouping and how have you faired? or is there now a new acronym of asset class/region/etc I should be watching?

Considering investing is supposed to be a medium to long term event I’m not too keen on jumping on fads as this seems to go against that philosophy.


(Big Boss) #3

BR maybe not… but IC is still on the gains train!


(Christopher) #4

Super interesting post @stephen!

Apparently @Cgwinning, it’s better to soar like an EAGLE, rather than drop like BRICS :man_facepalming:t3: (sorry, no really I am so very sorry) :roll_eyes:

The EAGLE moniker is an acronym from ‘Emerging and growth-leading economies’ coined by BBVA, the Spanish bank. It covers a broader range of economies than say BRICS, MINT, SANE, and CIVETS. Rather than the grouping being fixed by country, the group changes yearly based on the bank’s forecasts. EAGLEs represent a projected 50% contribution to global growth by 2020 vs. a 14% contribution by the G7 economies.

The BBVA methodology is here:
https://www.bbvaresearch.com/en/bbva-eagles-methodology/

and their last report, from 2016 is here:

Different groupings and classifications aside, these fast growing dynamic economies certainly represent large opportunities for growth over the longer term, and I definitely wouldn’t write them off as fads. China and India are the obvious standouts, and given the sheer size of their internal market, combined with the newly emerging and rapidly growing middle classes, we’ll undoubtedly see more and more home grown successes becoming household names in Western economies. TATA are an obvious Indian example, but what about an Indian or Chinese FMCG powerhouse unseating Unilever or ReckittBenckiser in the not too distant future…?

Political risk, currency risk, differing governance standards are all threats to this growth potential, but these don’t just come from EMs. Looking west to Washington or here in our very own garden doesn’t currently inspire too much confidence right now…

And then there’s this; the New Development Bank, a credible, and dare I say a potentially formidable challenger to (the ultimate legacy institution) the World Bank. A pretty serious statement of intent. Whilst these countries, their leaders and their citizens certainly mean business, if you are going to invest it’s important to carry out as much research and due diligence as possible, not without it’s own challenges of course. I think it’s also worth noting that these tidy acronyms mask very complex economies. China has a different set of challenges to say India and India to Nigeria. Byron Wein (of Blackstone fame) wrote an excellent piece several years ago on the differences between China and India, and in his view critical success factors specific to each country. I’ll post it here if I can find it.


#5

This is a fantastic post @CTE so much info! Thanks for taking the time, now I need to take the time and read it again!


(Tommy Lowe) #6


#7

You got my brows down to a T! :thinking: