The BRIC-or-Bust ETFdb Portfolio is now available to ETFdb Pro members and those with a free 7-day trial of the Pro subscription. This new portfolio, one of more than 40 all-ETF model portfolios available at ETFdb.com, is designed for risk-tolerant investors who wish to construct a well rounded portfolio that focuses on the economies of Brazil, Russia, India, and China. The investment thesis behind the BRIC-or-Bust ETFdb Portfolio may appeal to those who are looking to implement a long-term, tactical strategy that is well positioned to benefit from the growth of the BRIC economies.
This ETFdb portfolio is geared towards investors who are bullish on the global economic recovery and who wish to favorably position themselves across four of the fastest growing emerging markets. Although many investors retain the perception that emerging markets are excessively risky, the developing world has become an increasingly critical component of any portfolio seeking to deliver capital appreciation over the long term. Fundamental drivers of economic growth in these developing nations include: rising populations, increasing levels of urbanization, an expanding consumer base, as well as ongoing investments in infrastructure, education, and healthcare.
The funds in the BRIC-or-Bust ETFdb Portfolio are designed to tap into the local economies of each BRIC nation by investing in small cap companies across each respective region. Although riskier than their large cap counterparts, we have chosen to overweight small cap equities for one compelling reason; smaller size companies are more sensitive to local consumption and demographic trends, making them more of a “pure play” on the local economy unlike large cap firms which tend to be multinational [see also BRIC ETF Investing: Small Cap Edition]. Another distinguishing feature is that this ETFdb portfolio does not include a traditional fixed income component. Instead, we have rounded out exposure with several currency products, and each one provides exposure to the local money market rate. We have opted for currency exposure in lieu of fixed income ETFs because the BRIC countries tend to pay out higher money market rates than their developed counterparts, helping to generate a current return for our portfolio as well as reducing overall volatility.
The complete BRIC-or-Bust ETFdb Portfolio is available to ETFdb Pro members or with a free 7-day trial to ETFdb Pro. Also check out our new Financials Free ETFdb Portfolio , as well as our Cheapskate Hedge Fund ETFdb Portfolio.
Also included with the ETFdb Pro subscription are more than 40 all-ETF model portfolios, including both retirement-focused and more tactical themed strategies. [To see all that is included, a free sample of the Emerging & Frontier Markets ETFdb Portfolio is available to all ETFdb readers]
Disclosure: No positions at time of writing.