BRICs & Emerging Markets
Chart of the Week for April 7-12, 2006
Following up on last week’s chart showing that international and emerging markets performed well during Q1 2006, we focus in on emerging markets. A few years ago, Wall Street coined the term “BRICs” to refer to the countries shown in the graph above. The theory is that these four areas are the places to watch and will show strong growth in the future — the dramatic return numbers so far this year in the local indices support this theory. Generally, emerging market funds have seen huge inflows since the start of the year. However, investors should be cautious and remember to stay diversified. These returns come with higher levels of risk. Also, analysts are concerned that globally increasing interest rates and lower consumer spending will cut into the great run that emerging markets have seen during the past few years.
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