DEFINITION of Taiwan, Israel, Chile and Korea - TICK
The Taiwan, Israel, Chile and Korea - TICK is an investment theme focusing on four economies that rank between the developed and developing nations. The four nations of Taiwan, Israel, Chile and South Korea – collectively known as TICK – share some common characteristics that enhance their investment appeal. In addition to having well-functioning economies with healthy growth rates and prosperous citizenry, these nations possess strong legal and business frameworks that reduce political and country risk. The TICK investment theme came about as a counterpoint to the popular BRIC, which encompasses the giant economies of Brazil, Russia, India and China.
BREAKING DOWN Taiwan, Israel, Chile and Korea - TICK
Some experts believe that the TICK nations are more appealing than the BRIC bloc from an investment viewpoint, given their smaller size, higher living standards and dynamic economies. Some also argue that the TICK nations possess sounder economic fundamentals than the BRIC giants, with historically lower rates of inflation and unemployment.
Taiwan's markets are among the most developed of this group. "A relatively well-developed commercial code and open-market policies that facilitate the flow of goods and capital have enabled small and medium-size enterprises to become the backbone of Taiwan’s expansion. A sound legal framework protects property rights and upholds the rule of law," the Heritage Foundation reports. Its markets, operated by the Taiwan Stock Exchange Corporation, are large and efficient, with more than 900 companies listed with a total market capitalization of more than $1 trillion.
Israel is a worldwide center of innovation with a robust capital markets. The Tel Aviv Stock Exchange at the end of 2017 had 457 listed companies with a $231 billion market cap. "Strong trade and investment ties outside of the Middle East insulate Israel’s technologically advanced free-market economy from regional political instability. The government plans further economic liberalization, but fiscal consolidation has been deferred in favor of populist spending and tax measures demanded by the governing coalition," reports the Heritage Foundation.
Chile is the least developed of this group, though it has one of the strongest economies in South America and is ranked a high-income economy by the World Bank. The Santiago Stock Exchange had a market cap of over $216 billion, and Heritage notes that Chile is one of the top 10 nations in terms of economic freedom. "With a transparent and stable business climate, Chile maintains a dynamic environment for entrepreneurs. Barriers to free trade are quite low, and commercial operations are aided by efficient regulations that support open-market policies. Foreign investment is welcome."
Korea's economy is also quite developed, with a market cap of over $1.3 trillion and many multinational companies. "Despite a high-profile corruption scandal that led to the president’s impeachment, the rule of law is fairly well institutionalized, supporting such other pillars of economic freedom as regulatory efficiency and market openness," Heritage reported. There's no index or ETF that invests in this group of countries, but indexes for each market are available.