NEW YORK (TheStreet ) -- Emerging markets have faced some heavy pressure in recent weeks as looming macroeconomic headwinds have weighed heavily on investor confidence and growth expectations. Despite this spate of weakness, fast-moving developing countries should not be ignored; in the event that clouds clear, they will likely regain leadership roles.
For many investors, the term, "emerging markets" immediately brings to mind a very specific basket of countries: Brazil, India, China and Russia. Together comprising the "BRIC" acronym, this foursome represents some of the largest and most recognizable players hailing from across the developing world.
While fast moving, these emerging and frontier markets are also inherently volatile. Given the size and influence of the BRIC countries, however, some of this risk may be toned down. Through the opening months of 2012, shares of the iShares MSCI BRIC Index Fund (BKF) and the SPDR S&P 500 ETF (SPY) have witnessed nearly identical performance.Given its geographically expansive take on the BRIC nations, a fund like BKF may appeal to a conservative investor looking to test the emerging market waters. Meanwhile, those with a more aggressive appetite for risk can turn to individual nations in order to personalize or enhance their own unique BRIC exposure. The latter plan is especially appealing considering the recent performance seen from these four nations. BKF, like most other BRIC-focused ETFs, sets aside the bulk of its portfolio to China and Brazil. Unfortunately, as macroeconomic headwinds have gathered, these two nations have become notable laggards. Although they remain buoyed in positive territory, both the iShares FTSE China 25 Index Fund (FXI) and the iShares MSCI Brazil Index Fund (EWZ) have struggled to hold up, compared to BKF and broader emerging markets ETFs like the Vanguard Emerging Markets ETF (VWO). FXI, the worst performer of the duo, has seen less than 8% gains in 2012. It tends to represent only a minor slice of many BRIC-specific funds, but India's marketplace has staged an impressive rally during this timeframe. Year to date, the WisdomTree India Earnings ETF (EPI) is at the front of the pack, returning an impressive 23%. This substantial climb comes as a relief to investors who watched India's market flounder over the course of 2011. Back in December, I mentioned on ETF Profits that, although the nation was facing slowing growth and inflation pressures, India looked intriguing and could potentially be an interesting play in 2012 as other regions struggled with looming headwinds. So far, this prediction has played out well.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV