Rich As A BRIC

Posted by Daniel Workman Sep 18, 2006

First let's define BRIC as an acronym for Brazil, Russia, India and China. With the exception of Russia, we have written in some detail about the fast growth of these countries.

In mid-September, Claymore Investments launched its Claymore BRIC Exchange Traded Fund (ETF) which trades on the Toronto Stock Exchange (TSX) under the ticker CBQ. The ETF is expected to start trading in the United States in October (EEB on NYSE).

The BRIC ETF is weighted 48% in Brazil, 33% in China, 14% in India with about 7% in Russia. The fund closely resembles the Bank of New York BRIC Select ADR Index.

Within the BRIC Fund, 31% is in energy stocks, 17% is in telecom, and 15% is in materials. The fund owns both common and preferred shares of Petroleo Brasileiro (PBR on NYSE) for a considerable 15.53% of BRIC ETF's total holdings. PBR's price recently moved down on news that Bolivia's oil fields may be nationalized. Watch how movement in PBR's stock price affects the unit price for the BRIC ETF.

According to Claymore, BRIC countries should grow at an annual rate of over 8% over the next 10 years which should outpace more developed nations like the United States, England and France. As well, the 8% growth also betters estimated growth rates for Latin America, Asia and Eastern Europe.

Although Suite101 does not give investment advice, I'd like to share some of my own personal investing.

Putting my international trade insights to work, I bought 100 shares of CBQ for $19.59 on September 11, 2006. A week later it was trading for $20.45. On June 5, 2007 CBQ closed at $29.76 up 52% in less than 9 months.

On June 4, 2007, Claymore has launched a Global Water Exchange Traded Fund.