'BRIC' ETF Investing: An Introduction

More and more people are realizing that there are great fortunes to be made in developing nations. Emerging markets such as Brazil, Russia, India and China (often referred to collectively as "BRIC") are giving investors serious returns, and an investment vehicle such as an exchange-traded fund (ETF) makes it easier than ever to invest overseas.

What's So Great About BRIC?

A few years ago, Goldman Sachs (GS) determined that the economies of Brazil, Russia, India and China were set to start growing at warp speed -- bound to eclipse the growth rates of most developing (and some developed) nations within the next couple of decades. Ever since then, the big investable idea has been that Brazil, Russia, India and China are pretty good places to invest your money if you want to cash in on that growth.

Now, Why ETFs?

ETFs are index funds that trade on exchanges the same way that stocks do. An ETF can make buying into hundreds of companies as easy as buying stock in one company. This simplicity means a lot when you're thinking about buying foreign investments. (To learn more about ETF investing, visit the TheStreet.com's ETF Center.)

ETFs have a lot more access to foreign stocks than most individual investors do. Since many companies abroad only trade on their home exchanges, they're somewhat out of reach (see "How Do I Invest Overseas?"). ETFs, though, can purchase stock in companies abroad, and then be purchased themselves here at home. Also, all of the legal wrangling (such as taxes, tariffs and local investment regulations) is taken care of by the ETF.