BRIC ETFs: The Latest Assessment For The Ultimate ETF Acronym
10 February 2010 at 3:33 pm by Gary Gordon
Emerging market darlings in BRIC (Brazil, Russia, India, China) haven’t struggled this severely since the ’09 summertime slump. Last year, the iShares MSCI BRIC Index Fund (BKF), the Claymore Mellon BRIC Fund (EEB), and the SPDR BRIC 40 (BIK) shed 14%, 15% and 16% respectively. The S&P 500 pulled back about half as much.
What’s interesting to note about last summer is that emerging markets… BRIC funds in particular… began pulling back weeks before the S&P 500. Whereas the bulk of the pullback for BRIC began in June 09, price recovery began in early July. In contrast, the S&P 500 began to falter in July, and later, followed the emerging markets lead higher.
The same may be happening once more. The high-to-low pullback percentages for BRIC ETFs are about the same as they were last summer. And the S&P 500 SPDR Trust (SPY) has dutifully shed about half the percentage amount as the BRIC ETFs yet again.
This time, China’s tightening policy was the catalyst, pulling BRIC ETF prices lower in December and early January. Yet the S&P 500 was hitting new highs as late as January 19, 2010.
After hitting new lows on Monday, February 8, BRIC ETFs gained ground on two follow-up days. China (PGJ) has been particularly strong in the last 2 days.
Is it possible that the emerging market superstars of BRIC will lead the way on yet another bullish rebound? Hmmmmm… if it doesn’t, expect the S&P 500 to test support at its 200-Day MA (approx 1020).
Disclosure Statement: ETF Expert is a web log (”blog”) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. The company and/or its clients may hold positions in the ETFs, mutual funds and/or index funds mentioned above. The company does not receive compensation from any of the fund providers covered in this feature. Moreover, the commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. Investors who are interested in money management services may visit the Pacific Park Financial, Inc. web site.
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