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20 April 2024

Invest in Bric markets but exercise caution

By Gavin Smith

Today's question is from 39-year-old Al Ain-based business owner Graeme Henderson, who is originally from Scotland: "I have been hearing more and more about Bric as a good opportunity for investment. Can you tell me a little more? Why are the countries bunched together in this way? Also, what options do I have for investing and how do I go about it in the UAE?"

Bric countries are generally considered to be Brazil, Russia, India and China. These countries have been bunched together as they are seen to be large emerging market nations that will drive the growth in each of their respective continents. The Bric countries are among the world's fastest-growing economies. Together, they account for more than 50 per cent of the total population in emerging markets, and domestic demand appears to be relatively robust.

The Bric stock markets have grown significantly in recent years but emerging markets are still considered to be volatile. You may wish to think about investing in emerging market funds that offer the above nations but also diversify into other, less volatile, countries as well.

Certainly, Bric markets offer outstanding growth prospects but I would not recommend you invest your entire portfolio in Bric – diversification is the key. These funds are available by investing in an electronic platform, which provides access to various funds and carry relatively low charges – although there are likely to be initial charges for opening the funds. The funds will also be accessible through some investment products of insurance companies – either lump sum or even through regular savings – and you are unlikely to pay initial charges on the funds. My advice would be to contact a professional financial adviser who should be trained and have the experience to design your portfolio investment to meet your needs and ambitions.

Independent Financial Advisor Gavin Smith analyses readers' portfolio for Emirates Business. He is Area Manager for consultants PIC, a member of the deVere Group of companies. Write to him at money@business24-7.ae


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