3) Breakout the BRICs for 2012
Investors of emerging markets, listen up.
The MSCI BRICs index, with a gain of 12.2% so far this year, is beating global emerging markets, up 8.9% for the year. According to Geoffrey Dennis, analyst at Citigroup, "outperformance should be a key theme for 2012."
All four BRIC markets (Brazil, Russia, India and China) are ranked in the top eight for best performing emerging markets year to date. India is up 17.1%, Brazil up 14.1%, Russia up 11.1% and China up 9.4%.Dennis' thesis is that "BRICS are at the forefront of the falling inflation and interest rate trends in emerging markets... All four BRIC countries have eased monetary policy recently." The Citigroup analyst also points out that that valuations for BRICs are cheaper than their non-BRIC emerging market counterparts. "For example, BRICs currently trade at 9.6x forward verses 11.9x for the non-BRICs." The firm is most bullish on China, followed by Brazil, Russia then India and forecasts at least a 25% gain for global emerging markets. In short, Citigroup says, buy on a pullback. But take heed. Emerging markets got killed in 2011. India lost a whopping 38%. And, the "rotation" that Citigroup writes about may not sustain through the entire year. Investors can find exchange-traded funds that track equities in BRIC countries as well as indices in emerging markets. TheStreet's
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV