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.

Andrew Van Sickle
By Andrew Van Sickle
published

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.

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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.

Andrew Van Sickle
Andrew Van Sickle

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.

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