The four nations of Brazil, Russia, India and China, collectively known as the BRIC, have changed how investors view of emerging markets. When Goldman Sachs (NYSE:GS) analyst Jim O'Neill, first coined the acronym over a decade ago, even he had no idea how big it would become. Besting even the investment banks own growth forecasts, the group has gone on to surpass a variety of developed market nations, in terms of economic prowess. Individual investors have embraced the concept in spades, with funds like SPDR S&P BRIC 40 (NYSE:BIK) seeing their assets swell. However, with the BRIC's continued rise to economic dominance, O'Neill's latest advice is to stop thinking of them as emerging markets and think of them as something in between.

Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

Call Them "Growth Markets"
In a speech at the Confederation of British Industry's employers' conference, O'Neill urged investors to stop calling the BRICs emerging and start referring to them as growth markets. As these four nations have seen their fortunes prosper and grow, they have moved beyond the emerging market moniker. In O'Neill's opinion, they have emerged. Although, not quite ready to be called developed, these growth markets will continue to see higher than average GDP and economic growth. Overall, the analyst believes that "it is kind of ridiculous to be thinking of these countries as emerging markets in the traditional sense. It is not sensible in terms of business." (For more on GDP, see The Importance Of Inflation And GDP.)

The BRIC creator isn't telling investors to abandon the four nations, quite the contrary. Over the next year, he believes that China will grow by the equivalent of Italy, which is currently the world's eighth largest economy. He is telling both investors and policy makers that they must see these countries apart from the traditional emerging markets; that they play a different part in portfolios and the world order.

For the average investor, these newly minted growth markets could be a great blend of continued growth opportunities, as well as some stability. A good analogy would like comparing them to mid-cap stocks, having some attributes of both small- and large-cap firms.

Finding the Remaining Growth Markets
While opportunities in the BRIC have been well documented, via group funds like the Guggenheim BRIC (NYSE:EEB) or individual country funds like the PowerShares India (NYSE:PIN), there are other "growth market" nations that offer prospects. Taking from his Next 11 concept, O'Neill believes that four other nations, in addition to the BRIC, could be great buys for the next few years.

Mexico continues to play second fiddle to Brazil, which is a shame. Rich in farmland, silver and copper, Mexico's export driven economy has thrived since the implementation of the 1994 NAFTA agreement. Recent trade deals with China and the EU will serve to do the same. The iShares MSCI Mexico (NYSE:EWW) offers a broad take on the country, while individual firms like tortilla maker Gruma (NYSE:GMK), offer an interesting take on the nation's consumer story.

Blessed with vast natural resources and very large young population, Indonesia could be the heir apparent to the growth market throne. To capture that opportunity, both the Market Vectors Indonesia Index ETF (NYSE:IDX) and iShares MSCI Indonesia (NYSE:EIDO) make ideal choices. (For related reading on the forward P/E, see How To Use The P/E Ratio And PEG To Tell A Stock's Future.)

Finally, trading near its 52-week low, the iShares MSCI Turkey (NYSE:TUR) could offer one of the deepest discounts in the "growth market" world. Offering a more service orientated economy, versus other emerging/growth markets, Turkey provides a unique opportunity in the space.

The Bottom Line
For investors, Jim O'Neill's new take on the BRIC and "growth markets" presents an interesting perspective on how we should see the world. Finding their place in between the developed and emerging spaces, the previous countries, along with South Korea (NYSE:EWY), provide a balance of growth and new-found stability, for portfolios.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Mutual Funds & ETFs

    ETFs Can Be Safe Investments, If Used Correctly

    Learn about how ETFs can be a safe investment option if you know which funds to choose, including the basics of both indexed and leveraged ETFs.
  2. Mutual Funds & ETFs

    The Top 5 Large Cap Core ETFs for 2016 (VUG, SPLV)

    Look out for these five ETFs in 2016, and learn why investors should closely watch how the Federal Reserve moves heading into the new year.
  3. Economics

    India: Why it Might Pay to Be Bullish Right Now

    Many investors are bullish on India for all the right reasons. Does it present an investing opportunity?
  4. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  5. Investing Basics

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  6. Stock Analysis

    6 Risks International Stocks Face in 2016

    Learn about risk factors that can influence your investment in foreign stocks and funds, and what regions are more at-risk than others.
  7. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  8. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  9. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  10. Investing

    3 Things About International Investing and Currency

    As world monetary policy continues to diverge rocking bottom on interest rates while the Fed raises them, expect currencies to continue their bumpy ride.
RELATED FAQS
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. How do mutual funds work in India?

    Mutual funds in India work in much the same way as mutual funds in the United States. Like their American counterparts, Indian ... Read Full Answer >>
  3. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  4. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  5. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  6. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center