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Half-Time Report: CIVETS Tops Lists of EM Acronyms

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Investors do not face a shortage of catchy investment acronyms for groups of both developed and emerging countries.

These acronyms represent convenient ways for market participants to discuss rapidly growing nations. As a result of the proliferation of ETFs, many of these nations' stocks have become highly accessible to ordinary investors.

The acronym craze arguably started over a decade ago, when Goldman Sachs (NYSE: GS) economist Jim O'Neill coined the term BRIC (Brazil, Russia, India and China). Global investment acronyms have grown in popularity and usage since then. With so many investors relying on these collections of letters, now is an opportune time to evaluate the first-half 2012 performances of some of the major acronyms' constituent countries.


The quartet of Brazil, Russia, India and China has largely transformed into a quintet that also includes South Africa. Many investors, institutional and retail alike, now refer to the quintet as BRICS. The collection of the iShares MSCI Brazil Index Fund (NYSE: EWZ), the Market Vectors Russia ETF (NYSE: RSX), the WisdomTree India Earnings ETF (NYSE: EPI), the iShares FTSE/Xinhua China 25 Index (NYSE: FXI) and the iShares MSCI South Africa Index Fund (NYSE: EZA) struggled in the first half.

This underperformance has likely occurred partially because India, Asia's third-largest economy, has been staring a possible move to junk status and expulsion from BRICS right in the face. In addition, Russian equities, and by virtue RSX, have been hammered by falling oil prices.

South Africa is dealing with a staggering 24 percent unemployment rate while Brazil's woes have been well-documented. Those woes include faltering commodities demand, which has plagued Petrobras (NYSE: PBR) and Vale (NYSE: VALE), and rising fears over the country's perceived hostility to Western energy firms doing business there.

Bottom line: The five major ETFs tracking BRICS nations offered an average return of just 0.01 percent in the first six months of 2012.


The collection of Colombia, Indonesia, Vietnam, Turkey and South Africa performed relatively well in the first half. In regards to ETFs, CIVETS has primarily benefited from the the Market Vectors Vietnam ETF (NYSE: TUR), the Market Vectors Egypt ETF (NYSE: EGPT) and the iShares MSCI Turkey Investable Market Index Fund (NYSE: TUR).

Egypt is classified as a frontier market. Despite concerns about high unemployment and political volatility, EGPT has been on fire this year. Vietnam, another frontier market, is getting a handle on its biggest economic concern: inflation. That catalyst helped VNM be one of the top performing non-leveraged ETFs in the first quarter. Even with some recent struggles, the ETF offers vast potential for patient investors.

The Global X FTSE Colombia 20 ETF (NYSE: GXG) was no slouch either in the first half. GXG jumped 13 percent through the end of June. EGPT, GXG, TUR and VNM helped CIVETS ward off a negative first-half run from the Market Vectors Indonesia ETF (NYSE: IDX) and a less-than-inspiring gain for EZA.

Bottom line: The average first-half return for CIVETS ETFs was 16.5 percent.


MIST, an acronym referring to Mexico, Indonesia, South Korea and Turkey, was coined by Goldman Sachs. South Korea's status as an emerging market has been routinely challenged. However, the iShares MSCI South Korea Index was up almost 4.9 percent in the first half.

IDX was the MIST ETF first-half laggard, but TUR led the charge with a gain of over 27 percent through June 29. The iShares MSCI Mexico Investable Market Index Fund (NYSE: EWW) was a standout among Latin America ETFs with a gain of 14.3 percent.

Bottom line: the four MIST ETFs returned an average of 10.7 percent through the first six months of the year.


The collection of Chile, Argentina, Peru, the Philippines and Thailand delivered a solid return in the first half. Granted, that solid performance included a 26.4 percent decline for the Global X FTSE Argentina 20 ETF (NYSE: ARGT).

In the first six months of 2012, ARGT's first-half tribulations all but offset the impressive run turned in by the iShares MSCI Philippines Investable Market Index Fund (NYSE: EPHE), one of the best-performing non-leveraged ETFs. For the first half of the year, the iShares MSCI All Peru Capped Index Fund (NYSE: EPU) and the iShares MSCI Thailand Index Fund (NYSE: THD) were two of the better choices amongst Latin America and Asia-Pacific country ETFs. Both funds notched double-digit gains.

Not to mention, the iShares MSCI Chile Investable Market Index Fund (NYSE: ECH) added 6.5 percent. If ARGT bounces back, CAPPT might continue its already impressive gains and attract enhanced credibility along the way.

Bottom line: the five CAPPT ETFs returned an average of 6.46 percent in the first half.

For more on international ETFs, click here.

Posted-In: Long Ideas News Short Ideas Emerging Market ETFs Commodities Global Econ #s Economics Best of Benzinga


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