BRIC ETF – for your portfolio

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BRIC ETF Trading

BRIC ETFs are Exchange Traded Funds that are investments in foreign securities, specifically those of Brazil, Russia, India and China, which make up the BRIC name. These countries have economies that investors believe show enough potential for steady growth that they’re worth the risk of investments in order to make a profit.

Why BRIC ETFs and Not Stocks?

ETFs offer several benefits over traditional stocks. One of the biggest benefits is that the money is spread out over a general fund rather than sunk into one individual stock. The fund works like a mutual fund in that way. The diversification of investment allows for less risk of loss. If you purchased stock and the price of that particular stock plummeted, it would be a guaranteed loss. But with a BRIC ETF, one single drop won’t make nearly as much a difference because the money is spread over several different companies.

Thanks to the way these ETFs are set up, someone who wants to invest in these foreign economies can choose one of the four countries to focus on, spreading their money among different securities from just one economy. Or an investor can choose a fund that diversifies among all of them, for even more protection against loss. Another benefit of an ETF is that it can be traded like stocks, in the way that mutual funds can’t. You can set a buy/sell price and there’s no minimum, so you don’t have to be a big investor to get your shares of a fund, and can in fact buy a single share at a time, if you choose.

A BRIC ETF in a Global Economy

Thanks to the ease of global travel and the Internet, which connects countries and erases boundary lines, global trade and business is at an all-time high. This world globalization has improved foreign economies, with many growing at a much higher rate in recent years despite recent recessions. It’s this growth potential that has investors ready to sink money into BRIC ETF trading.

Global Economic Risks

Most investors and experts recommend against holding some shares of any ETF, including a BRIC fun, as your only investments. Exchange traded funds are ideal as an addition to a diversified portfolio, but too risky to hold as your only investment. This is especially true with BRIC ETF trading.

Because political upheaval among other unpredictable incidents could send the foreign economies into a slow growth period at any time, that risk should be weighed against the potential for profit before making heavy investments into these funds.


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  1. Pingback by ETFs in General | NMFS

    [...] If you follow stock and market news at all, then you know that foreign investments can be some of the riskiest, and therefore the most profitable when they work out for the investors. If you’ve ever considered dabbling in foreign investments, one way to do it that doesn’t bear as much risk as investing in a single foreign company, is investing in a BRIC ETF. [...]

    on September 7, 2010 at 2:50 am