The Brics have crumbled

The Brics bubble has officially burst 14 years after then Goldman Sachs economist Jim O’Neill coined the acronym for the emerging markets.

15-11-12-Oneill-634

Jim O'Neill coined the Brics term 14 years ago

The Brics bubble has officially burst. Fourteen years after then Goldman Sachs economist Jim O'Neill coined the acronym for Brazil, Russia, India and China (South Africa was added later), Goldman is merging its Brics fund with a broader emerging-market fund. The fund has lost 88% of assets since 2010; its value is down by more than 20%.

O'Neill's coining of the Brics term, to "jazz up otherwise turgid" research, "did wonders for his employer's revenues and his own pay", notes News.AsiaOne.com. And it didn't just stimulate interest in emerging markets it also caught the mood in academia, symbolising a world no longer dominated by Europe and the US.

It's also a great illustration of why you should be wary of all things fashionable when investing. Brics may have been a catchy acronym, says James Moore in The Independent, but the four countries had little in common beyond being large emerging markets at similar stages of development.

In reality, each has been vulnerable to several different problems, from the commodities slump and over-investment, to corruption and political instability. But "it's probably too much to hope that the Bric backers will have learned their lesson from this". Get set for more catchy but pointless acronyms.

Recommended

3 emerging-market stocks to watch
Share tips

3 emerging-market stocks to watch

The top emerging-market stocks to keep an eye on, according to Union Bancaire Privée’s Eli Koen.
1 Dec 2022
Three of emerging Asia’s best value stocks
Share tips

Three of emerging Asia’s best value stocks

If you’re looking to boost your investment in Asia, then here are the stocks you should be considering, says Nitin Bajaj of the Fidelity Asian Values …
22 Nov 2022
Invest in Brazil as the country gets set for growth
Emerging markets

Invest in Brazil as the country gets set for growth

It’s time to invest in Brazil as the economic powerhouse looks set to profit from the two key trends of the next 20 years: the global energy transitio…
3 Nov 2022
Shining a light on India
Advertisement Feature

Shining a light on India

Despite some short-term challenges, India remains very attractive for investors. Here’s why.
2 Nov 2022

Most Popular

Council tax increases 2023 – how much more will you pay?
Tax

Council tax increases 2023 – how much more will you pay?

Your council tax bill will go up in April - we reveal the councils that have confirmed what this year’s increase will be.
23 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
Share tips of the week - 27 January 2023
Investments

Share tips of the week - 27 January 2023

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages
27 Jan 2023