When BRICs become B.I.C.

March 2022
By Joy Yang, Global Head of Index Product Management

In 2001, Jim O’Neill coined the concept BRICs, creating a powerful marketing opportunity for investing in Brazil, Russia, India and China as a collective to capture Emerging Market growth. With the world focused on the Russian-Ukraine crisis, international sanctions are crushing Russian companies and the overall Russian economy, making Russia uninvestable, and triggering a surge in commodity and energy prices. These effects have divergent consequences for commodity importers such as India and China versus commodity and energy producers such as Brazil. This divergence can be seen in the outperformance of MVIS Brazil Index (ticker: MVBRATR) over MVIS India Index (ticker: MVINDTR) since the Russian invasion on February 24, 2022 as shown in the performance chart below. 

Emerging Markets are not a homogeneous collective. With differences in growth drivers and ever-evolving risk dynamics, investing in Emerging Markets requires careful assessment of the individual growth and risk for each country. MVIS provides individual Emerging Market country indices for investors to measure, benchmark and capture the performance and characteristics of individual countries.  MVIS indices provide a more accurate reflection of an economy than traditional indices using a pure-play concept that includes non-local companies incorporated outside the target country which generate at least 50% of their revenues in the target country and excludes local companies within a target country that do not, providing a more complete picture of the sectors and industries that impact the local economy.

MVIS Brazil Index and MVIS India Index

28/02/2021-25/03/2022

Source: MV Index Solutions, CryptoCompare. Data as of 25 March 2022.

 

About the Author:

Joy Yang is Global Head of Index Product Management at MV Index Solutions (MVIS). She is responsible for managing MVIS products and services to accelerate innovation in financial index design and adoption. Joy brings more than 25 years of investment experience to MVIS, having led teams delivering index and quantitative-active investment solutions at Arabesque Asset Management, Dimensional Fund Advisors, Vanguard, Aberdeen Standard Investments, AXA Rosenberg and Blackrock. Joy has an MBA from the University of Chicago Booth School of Business, and a BS in Electrical Engineering from Cooper Union’s Albert Nerken School of Engineering.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.

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