Charting The Recent Decline Of The BRIC Components

Includes: BKF, EEM, EPI, EWZ, FXI, RSX
by: Bill Luby

U.S. stocks were mostly green in today's session, though there was a good deal of red in global stocks -- notably in emerging markets. The popular emerging markets ETF iShares MSCI Emerging Markets Index (NYSEARCA:EEM) is down close to 1% as I type this, and the iShares MSCI Brazil Capped Index ETF (NYSEARCA:EWZ) is down more than 2%.

In the chart below, I plot the recent decline of the four large BRIC emerging market country ETFs: Brazil (EWZ), Russia (NYSEARCA:RSX), India (NYSEARCA:EPI), and China (NYSEARCA:FXI). While all four country ETFs have declined between 8% and 20% during the past six weeks, the various woes afflicting each country appear to be country-specific to a large extent. However, obviously the issues affecting China's manufacturing base and export market have a significant upstream impact on Brazil.

Emerging markets in general have been struggling of late, but difficulties in Brazil, India, and China have helped to fuel a global sell-off. Going forward, investors will be well-served to keep an eye on all four components of the BRIC block, as well as aggregated BRIC ETFs -- such as the most popular issue in this space, the iShares MSCI BRIC Index (NYSEARCA:BKF).

For those who are interested in evaluating the risk and uncertainty in emerging markets in general, the recent VEXXM as a measure of emerging markets volatility and risk is recommended reading for some background and information on VXEEM, the CBOE Emerging Markets ETF Volatility Index.

About this article:

Problem with this article? Please tell us. Disagree with this article? .