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Bye, Bye BRICs. Hello CIVETS!

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BRICS? NOT THAT KIND
DailyFeed
Beyond the BRICs (Brazil, Russia, India and China), what other emerging markets are poised for sustained high growth?

The lads at The Economist have weighed in: it’s the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) that now look like the best bet, in their view.

Investors with courage, cash and long time horizons have hunted for markets besides the BRICs, and various attempts have been made to meet this demand: Goldman Sachs, for example, proposed the N11, or "Next 11" emerging markets: Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico, Nigeria, Pakistan, the Philippines, Turkey and Vietnam.

However, our colleagues at The Economist think there are reasons to doubt the catch-up prospects of a number of economies in this group. Instead, the CIVETS provide a better investment theme as these countries share a number of positive attributes: sizable, young populations, diversified economies, sophisticated financial systems. Also, they’re not suffering from high inflation, trade imbalances or sovereign debt bombs.

The Economist Intelligence Unit expects the CIVETS to post average annual GDP growth of 4.5% over the next twenty years—slightly below the 4.9% average forecasted for the BRICs, but well above the 1.8% forecast for the G7.

For more insight and observations about the CIVETS: check out the analysis of Frank Holmes, the CEO and CIO of U.S. Global Investors. He also likes the long-term prospects for most of these countries.

Among iShares ETFs related to BRICs and CIVETS are the MSCI BRIC Index Fund (BKF), Emerging Markets Fund (EEM), Brazil Fund (EWZ), Xinhua China 25 Fund (FXI) and Mexico (EWW).
POSITION:  No positions in stocks mentioned.

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