Three of the Bric's cheaper cousins to buy now

The Bric countries - an acronym which was coined by Goldman Sachs chief economist Jim O'Neill in November 2001 in a report on Brazil, Russia, India and China - have been a massive boon to the fund industry in recent years. The Bric nations now comprise 40% of the S&P/IFCI index (which represents emerging-market stocks that foreign investors can invest in easily), starting from less than a quarter in 2002. But while growth prospects for the Bric countries are certainly attractive, some of their less-well-known peers also offer excellent opportunities - and are a lot cheaper than the likes of China. Here are three emerging markets we like outside the big four.

Emerging market funds: South Korea

One of the factors making investors wary of South Korean stocks in recent years has been its neighbour to the north. But with the market trading on a p/e of 10.7, half the valuation of the US market, the nuclear risk from North Korea looks overblown, says Mark Hulbert on MarketWatch.com. The economy is benefiting from a boom in telecoms and steel manufacturing that is in turn feeding into its shipbuilding sector - exports are up 11% on last year. Some individual stocks look expensive, but the Korea Fund (NYSE: KF), a US-listed investment trust, is a cheap way to gain exposure to the country, says Hulbert. It currently trades at a 7% discount. He also recommends the iShares MSCI South Korean (AMEX: EWY) fund.

Another country that has struggled in the wake of political tension with its neighbour is Taiwan. But Taiwan remains a cheap way to play the boom in China as nearly 40% of the semi-conductors and electronic equipment made there goes to the mainland. On top of this, subsidiaries of Taiwanese IT firms top the list of China's top 200 exporters. The country's GDP growth is expected to average 4.1% between now and 2010 and the market trades on a p/e of 18.7, compared to China's hugely over-inflated 43. The best way in is through the ETF iShares MSCI Taiwan (AMEX: EWT).

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Vietnam is emerging from China's shadow as Asia's newest tiger economy; the IMF is forecasting economic growth of 7.8% this year. Vietnam's production and labour costs are one third that of China's, and domestic consumption is booming amid strong jobs growth. Average spending per head is set to grow by about 10.5% a year between now and 2010. Aim-listed fund Vietnam Holdings (VNH) focuses on buying into privatisations of state-owned companies, while the Vietnam Opportunity Fund (VOF) gives exposure to a wide range of sectors.