Decoupling will be a test to see if BRICs live up to the hype. If a nation of 300 million will wag 2.7 billion than the theory of return to natural size is not 50 years (1990 to 2040) time scale. More likely to be 200 years!
Funds: BRIC: A 4-letter word for growth
By Michael Tsang Bloomberg News
Published: August 17, 2006
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- Funds: BRIC: A 4-letter word for growth
By Michael Tsang Bloomberg News
Published: August 17, 2006
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
TOKYO Funds that invest in Brazil, Russia, India and China are outperforming emerging markets by combining the two most populous nations in the world with two countries that are feeding their economic expansions.
"The four countries all have high economic growth and there seems to be a virtuous cycle between them," said Grant Yun Cheng, who co-manages the $489 million dit-BRIC Stars Fund in Frankfurt.
Demand for commodities and building materials in China and India is injecting money into the economies of Russia, a leading oil producer, and Brazil, which is rich in natural resources, he said.
"China needs a lot of raw materials, which Brazil and Russia provide," said Cheng, whose Deutscher Investment Trust is a unit of Allianz Global Investors. He started the fund last September. "India is also moving to more infrastructure spending, so it will also need a lot of commodity investment."
Money managers from HSBC Holdings to Franklin Resources are capitalizing on the groundswell of interest in so-called BRIC funds.
Stock markets in the four countries have posted gains that are among the best in the world in the past 12 months.
Of the 30 BRIC-related equity funds tracked by Bloomberg News, 75 percent were started in the past year. Assets held by 12 of the biggest funds have more than doubled to $10 billion in 2006, according to Emerging Portfolio Fund Research.
The Morgan Stanley Capital International BRIC index has gained 25 percent this year.
That compares with an 8.9 percent advance in the broader MSCI emerging markets index of 25 developing countries.
Among BRIC funds with track records from the start of the year, Schroders' BRIC Fund and HSBC's BRIC Freestyle Fund have been the best performers, returning 26.7 percent and 24.4 percent in 2006.
Both funds held the Russian company, Gazprom, the largest natural gas producer, and Petróleo Brasileiro, Brazil's state-controlled oil company, among their top three holdings at the end of June. Those shares have gained 61 percent and 31 percent in dollar terms this year as energy prices have increased.
Gains in the four BRIC markets are being driven by China and India, the fastest-growing economies among the 20 largest in the world. Their expansions are in turn driving demand for commodities like iron ore from Brazil and oil from Russia.
The acronym BRIC was coined by Jim O'Neill, chief economist at Goldman Sachs Group, in a report published in November 2001, which was titled "Building Better Global Economic BRICs."
He said that the four countries would join the United States and Japan as the biggest economies in the world by 2050, eclipsing most of today's developed nations.
BRIC markets have proved to be more resilient than those of other developing countries since a worldwide sell-off in May and June caused the MSCI emerging markets index to lose almost a quarter its value.
All four markets have gained more than the MSCI index since their troughs in mid-June, with the dollar- denominated Russia Trading System index rising 33 percent.
China's economy has grown tenfold since Deng Xiaoping began loosening regulations in 1978.
It overtook Britain in 2005 as the world's fourth-largest economy, and now trails only the United States, Japan and Germany. In the second quarter, China's economy grew at its fastest pace in a decade.
China, one of the world's largest energy users, may consume 5 percent more oil this year as growth increases demand and reliance on fuel imports rises, the government said last week. Shares of PetroChina, the biggest oil company in China, have surged 43 percent this year. Shares of Cnooc, the biggest Chinese offshore oil producer, have jumped 36 percent.
The $775 billion Indian economy grew 9.3 percent from a year earlier in the quarter ended March 31, rounding off the financial year with growth of 8.4 percent - the fastest after China among the 20 biggest economies. Prime Minister Manmohan Singh plans to increase spending on infrastructure by 24 percent to 992 billion rupees, or $21 billion, in the year to March 31.
Shares of Associated Cement, the Indian cement maker with the largest production capacity, have soared 66 percent this year, which is the biggest gain on the benchmark Sensitive index, or Sensex.
Russia this month raised its economic growth forecast for the year to 6.6 percent after prices surged for petroleum products, the country's biggest export. The $770 billion economy is heading for its eighth consecutive year of growth, the longest period of expansion since the fall of the Soviet Union.
The largest member in the dollar-denominated Russian Trading System index is Lukoil, the biggest Russian oil company. The stock has jumped 47 percent this year.
The economy of Brazil, the largest in Latin America, may expand 4 percent this year, according to estimates by its central bank. This compares with a 2.3 percent expansion in 2005.
Brazil is home to Vale do Rio Doce, the largest producer of iron ore. Shares of Vale have risen 5.6 percent in dollar terms this year, after increasing 49 percent in 2005.
"Brazil is a cheaper way of buying growth stories such as China and India," said Alfredo Rotemberg, a fund manager at OppenheimerFunds in Beechwood, Ohio.
For some money managers, BRIC funds represent a marketing ploy with little more than a catchy name.
"It's a random selection of four large markets" that have outperformed recently, said Gerald Smith, a fund manager at Baillie Gifford in Edinburgh. "It's a great marketing concept that doesn't really make sense as an investment strategy."
Dimitri Chatzoudis, who manages the ABN AMRO Global Emerging Markets Equity Fund in Amsterdam, said that much of the recent gains in BRIC markets have been exaggerated by inflows themselves.
"All the money going into BRIC funds is perhaps why they have done so well," he said. "That can easily reverse."
Mark Mobius of Templeton Asset Management, which owns about $30 billion in emerging market stocks, counters that grouping the four countries together makes sense because they all have large, comparatively young and increasingly wealthy populations.
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