BRIC Performance In 2009

There's tremendous chatter regarding the necessity of owning emerging market stocks in one's portfolio, and specifically maintaining a permanent BRIC holding. As most investors are aware, BRIC stands for Brazil, Russia, India and China - four countries that account for 40% of the world's population, 27% of its GDP and some of the most rapidly modernizing economies anywhere.

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How These 'Tier 2' Economies Fared In 2009
Below we examine several ETFs associated with BRIC nations and compare them with some more familiar, domestic indexes.

The iShares MSCI BRIC Index Fund (NYSE: BKF) managed to gain approximately 80% on the year, a far cry better than the roughly 20% achieved by the S&P 500 and Dow. BKF seeks to match the price and yield performance of the combined equity performance of the local BRIC stock markets themselves.

A Different-Sized BRIC
The SPDR S&P BRIC 40 ETF (NYSE: BIK) offers investors a slightly modified version of the iShares fund, as it's based on the S&P BRIC 40 Index, a collection of sizable and liquid issues from those four countries that investors could practically get their hands on (through ADRs, etc.). BIK is up slightly less since the first trading day of 2009, with a slightly better than 70% gain. (For related reading, check out Go International With Foreign Index Funds.)

For investors interested in investing in one or more BRIC nations without committing to all four, a wide variety of products are available, of which we highlight here only a minute sampling.

The Market Vectors Russia ETF (NYSE: RSX) is based on the DAXglobal Russia+ Index, whose return and yield it attempts to replicate. The Index is concentrated in oil and gas, telecommunication, steel production and mining companies based in Russia. Since the start of the year, RSX stock is up over 130%, making it far and away the best BRIC performer on the year.

Music In Brazil
The Brazilian market turned in a near victory with its better than 105% return this year, as measured by the iShares MSCI Brazil Index (NYSE: EWZ), an ETF that mirrors the total return of the Brazilian bourse.

India was the third-best BRIC market to invest in this year, based on the return of the Barclay's Bank iPath MSCI India Index ETN (NYSE: INP), which is up appoximately 100% since last New Year's.

China was the laggard on the year, based on the performance of the iShares FTSE/Xinhua China 25 Index (NYSE: FXI), composed of the 25 largest and most liquid stocks available to international investors on the Chinese market. FXI was up nearly 50% since the year's opening trade. (For more, see Forging Frontier Markets.)

The Wrap
Over the last 12 months, many of the individual BRIC market performances were greater than 100% - better than either the Dow or S&P 500. Had investors held even a small percentage of their portfolios in a combined BRIC ETF, they would have substantially augmented their 2009 portfolio performance.

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