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Charting The BRIC Decline

ByBill Luby
Published 07/02/2013, 03:20 PM
Updated 07/09/2023, 06:31 AM

While many U.S. stocks, Tuesday, were in the green, there was a good deal of red in global stocks, notably in emerging markets where the popular EEM emerging markets ETF was off more than 2% just before the close, and the Brazil (EWZ) was down just shy of 4%.

Country-Specific Woes
In the chart below, I plot the recent decline of the four large BRIC emerging market country ETFs: Brazil (EWZ); Russia (RSX); India (EPI); China (FXI). While all four country ETFs have declined between 8% and 20% during the past six weeks, the various woes afflicting each country appear to be country-specific to a large extent, though obviously the issues affecting China’s manufacturing base and export market have a significant upstream impact on Brazil.

Emerging markets in general have been struggling as of late, but difficulties in Brazil, India and China have helped to fuel a global selloff.

Going Forward
Investors will be well-served to keep an eye on all four components of the BRIC block, as well as aggregated BRIC ETFs, such as the most popular issue in this space: the iShares MSCI BRIC Index (BKF).

For those interested in evaluating the risk and uncertainty in emerging markets in general, the recent VEXXM as a Measure of Emerging Markets Volatility and Risk is recommended reading for some background and information on VXEEM, the CBOE Emerging Markets ETF Volatility Index.
Recent BRIC Decline
source(s): StockCharts.com

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