Stay On Sidelines With BRIC Funds

November 10, 2014

With the Russian ruble down almost 30 percent this year and India stocks at all-time highs, the divergence in the group is unsettling.

It's easy to dismiss the "Brazil, Russia, India, China" market as an odd amalgam that's gained popularity only because it has a conveniently easy-to-pronounce acronym. That would belie the fact that many investors still view the quartet as a kind of "sweet spot" in the emerging market spectrum, and there's roughly $750 million allocated to the three major ETFs tracking the space.

Because of Russia's very bad year, it would be logical to assume that the worst-place finisher would be the ETF with the highest weighting in Russia:

BRICHoldings

Which would lead you to the Guggenheim BRIC ETF (EEB | C-53). But you'd be shockingly wrong. Here's how the three funds have actually fared:

BRICPerf

As expected, EEB is the loser here, with the winner—if you can call it that—being the SPDR S&P BRIC 40 (BIK | B-66) and Analyst Pick iShares MSCI BRIC (BKF | B-96) splitting the difference, both about flat on the year.

But what's shocking to me is that none of these funds is doing worse. The reason, however, is simple:

 

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