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

Three top-notch Asian stocks to buy
Share tips

Three top-notch Asian stocks to buy

Professional investors Adrian Lim and Pruksa Iamthongthong, managers of the Asia Dragon Trust, pick three of their favourite Asian stocks to buy now.
23 Sep 2022
Seoul attempts to close the “Korea discount” for stocks
Emerging markets

Seoul attempts to close the “Korea discount” for stocks

South Korean stocks suffer from the “Korea discount” – with the country still classified as an emerging market, investors are reluctant to pay a premi…
21 Sep 2022
India’s economy has come a long way in 75 years, but where next?
Emerging markets

India’s economy has come a long way in 75 years, but where next?

India has come a long way since independence to become the world's fifth-largest economy. But early mistakes and now a divisive leader are holding bac…
12 Sep 2022
Brazilian stocks will bounce back in 2023
Emerging markets

Brazilian stocks will bounce back in 2023

Brazil's Ibovespa stockmarket index has fallen by 9% since it peaked in April. But with an election in 2023 and current president Jair Bolsonaro on co…
7 Sep 2022

Most Popular

Beating inflation takes more luck than skill – but are we about to get lucky?
Inflation

Beating inflation takes more luck than skill – but are we about to get lucky?

The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank…
26 Sep 2022
The pick of this year's best-performing investment trusts
Investment trusts

The pick of this year's best-performing investment trusts

Market conditions haven’t been easy, but these investment trusts have delivered strong growth, says David Stevenson.
23 Sep 2022
Share tips of the week – 23 September
Share tips

Share tips of the week – 23 September

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
23 Sep 2022