Moneymen love their acronyms – but investors need to learn their ABC so they can tell their BRICS from their CIVETS to keep up.
For the uninitiated, BRICS and CIVETS are groups of emerging market economies.
The BRICS countries are Brazil, Russia, India and China, while CIVETS are the lesser-known Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.
These countries make up 10 of the economies with the fastest growth – Nigeria, South Korea and Mexico are the others creeping in to the top placings.
The groupings are artificial. Unlike the European Union, most of the countries have no deep political or economic links and the name is simply convenient rather than meaningful.
The most common way to invest in BRICs or CIVETS is through funds specialising in emerging markets.
Many banks, insurance companies and investment houses have well-established emerging market funds.
Retail sales in the emerging 10 is set to outstrip that in the G10 most developed economies by 2016, as the E10 streak to $12 billion while the G10 hobble to around $9 billion.
The picture is the other way around now – with the G10 hitting $7.5 billion while the E10 limped to $5 billion, according to figures from the Economist Intelligence Unit.
JP Morgan Asset Management has announced a new emerging markets income fund that aims to give investors with exposure to high dividend-paying emerging market companies, helping to form part of a diversified income portfolio.
Mike Parsons, head of UK fund sales at JP Morgan Asset Management said: “As an investment house, we have a long established and proven track record in emerging market investment processes.
“Our new fund will offer investors who are looking to diversify their portfolios and seeking an additional source of income, an attractive option. We believe this is a truly exciting fund, particularly with its ability to invest up to 20% of the portfolio in emerging market debt.
“This will allow the fund manager the flexibility to offset some of the volatility in equity markets and offer the opportunity to deliver superior risk-adjusted returns.”
