Investors do not face a
shortage of catchy investment acronyms
for groups of both developed and emerging countries.
These acronyms represent convenient ways for market
participants to discuss rapidly growing nations. As a result of
the proliferation of ETFs, many of these nations' stocks have
become highly accessible to ordinary investors.
The acronym craze arguably started over a decade ago, when
Goldman Sachs (NYSE:
) economist Jim O'Neill coined the term BRIC (Brazil, Russia,
India and China). Global investment acronyms have grown in
popularity and usage since then. With so many investors relying
on these collections of letters, now is an opportune time to
evaluate the first-half 2012 performances of some of the major
acronyms' constituent countries.
The quartet of Brazil, Russia, India and China has largely
transformed into a quintet that also includes South Africa. Many
investors, institutional and retail alike, now refer to the
quintet as BRICS. The collection of the iShares MSCI Brazil Index
), the Market Vectors Russia ETF (NYSE:
), the WisdomTree India Earnings ETF (NYSE:
), the iShares FTSE/Xinhua China 25 Index (NYSE:
) and the iShares MSCI South Africa Index Fund (NYSE:
) struggled in the first half.
This underperformance has likely occurred partially because
India, Asia's third-largest economy, has been staring a possible
to junk status and expulsion from BRICS right in
. In addition, Russian equities, and by virtue RSX, have been
hammered by falling oil prices.
South Africa is dealing with a staggering 24 percent
unemployment rate while Brazil's woes
have been well-documented
. Those woes include faltering commodities demand, which has
plagued Petrobras (NYSE:
) and Vale (NYSE:
), and rising fears over the country's perceived hostility to
Western energy firms doing business there.
Bottom line: The five major ETFs tracking BRICS nations
offered an average return of just 0.01 percent in the first six
months of 2012.
The collection of Colombia, Indonesia, Vietnam, Turkey and
South Africa performed relatively well in the first half. In
regards to ETFs, CIVETS has primarily benefited from the the
Market Vectors Vietnam ETF (NYSE:
), the Market Vectors Egypt ETF (NYSE:
) and the iShares MSCI Turkey Investable Market Index Fund (NYSE:
Egypt is classified as a frontier market. Despite concerns
high unemployment and political volatility
, EGPT has been on fire this year. Vietnam, another frontier
market, is getting a handle on its biggest economic concern:
inflation. That catalyst helped VNM be one of the top performing
non-leveraged ETFs in the first quarter. Even with some recent
struggles, the ETF
offers vast potential for patient investors
The Global X FTSE Colombia 20 ETF (NYSE:
) was no slouch either in the first half. GXG jumped 13 percent
through the end of June. EGPT, GXG, TUR and VNM helped CIVETS
ward off a negative first-half run from the Market Vectors
Indonesia ETF (NYSE:
) and a less-than-inspiring gain for EZA.
Bottom line: The average first-half return for CIVETS ETFs was
MIST, an acronym referring to Mexico, Indonesia, South Korea
and Turkey, was coined by Goldman Sachs. South Korea's
status as an emerging market has been routinely
However, the iShares MSCI South Korea Index was up almost 4.9
percent in the first half.
IDX was the MIST ETF first-half laggard, but TUR led the
charge with a gain of over 27 percent through June 29. The
iShares MSCI Mexico Investable Market Index Fund (NYSE:
) was a standout among Latin America ETFs with a gain of 14.3
Bottom line: the four MIST ETFs returned an average of 10.7
percent through the first six months of the year.
The collection of Chile, Argentina, Peru, the Philippines and
Thailand delivered a solid return in the first half. Granted,
that solid performance included a 26.4 percent decline for the
Global X FTSE Argentina 20 ETF (NYSE:
In the first six months of 2012, ARGT's first-half
tribulations all but offset the impressive run turned in by the
iShares MSCI Philippines Investable Market Index Fund (NYSE:
), one of the best-performing non-leveraged ETFs. For the first
half of the year, the iShares MSCI All Peru Capped Index Fund
) and the iShares MSCI Thailand Index Fund (NYSE:
) were two of the better choices amongst Latin America and
Asia-Pacific country ETFs. Both funds notched double-digit
Not to mention, the iShares MSCI Chile Investable Market Index
) added 6.5 percent. If ARGT bounces back, CAPPT
might continue its already impressive gains and
attract enhanced credibility along the way
Bottom line: the five CAPPT ETFs returned an average of 6.46
percent in the first half.
For more on international ETFs, click
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