Goldman Sachs bikin jagoan baru pengganti BRIC, yaitu MINT. Sementara HSBC punya jagoan sendiri, namanya CIVETS. Apapun namanya, baik MINT atau CIVETS, huruf "I" selalu akronim dari INDONESIA... Mantaaap...!!!
BRIC, MINT or CIVETS? Investors suffer acronym anxiety
Mon, Jan 20 09:06 AM EST
By Carolyn Cohn
LONDON (Reuters) - Which investment takes your fancy: BRIC, MINT or
CIVETS? For many fund managers seeking the next big thing in emerging
markets, the answer is none.
Acronym investment - putting money into small groupings of markets which
often have little in common beyond a broad economic concept - is giving
way to acronym anxiety.
Former Goldman Sachs economist Jim O'Neill set the ball rolling in 2001
when he created the BRIC family of Brazil, Russia, India and China.
Many of these countries and others lumped together under separate
acronyms have, at least until recently, enjoyed turbo-charged economic
growth. But investment gains are not guaranteed and underperforming
local stock markets have led fund managers to flee what had been
Assets under management in BRIC funds fell to 9 billion euros at the end
of last year from 21 billion at the end of 2010, according to Lipper
data, while assets under management in broader emerging equity funds
have grown in that time.
Goldman Sachs's own BRIC fund has lost 20 percent in value over the past three years.
Undaunted, O'Neill has coined a new acronym. In a series on BBC radio
this month, he championed the MINT group - Mexico, Indonesia, Nigeria,
Turkey - as the next giants after the BRICs. O'Neill stresses that MINT -
like BRIC before - is an economic, not an investment, concept and his
programs explored each country's problems as well as its potential.
Nevertheless, the appeal of acronym investment is fading. Fund managers
say such groupings do not take into account different stages of
development of the countries involved and risk sidelining other
promising markets. The groupings have also frequently suffered from
disappointing performances of their listed companies, the main target of
O'Neill's timing is not ideal. Turkey has been rocked by an
investigation into alleged corruption following street protests last
summer, while Nigerian politics are in turmoil before elections next
Indonesia, along with other emerging economies which are running large
current account deficits, is experiencing a flight of investors.
"Mexico, Indonesia, Nigeria and Turkey are all very interesting
countries but not much connected beyond the excuse for having an
acronym," said Richard Titherington, chief investment officer of
emerging equities at JP Morgan Asset Management. Titherington prefers
groupings by concepts such as markets where companies offer the highest
Investors in the BRIC countries have already found out the hard way that
economic growth may not convert into stock market gains, and some
analysts blame problems with corporate governance in markets such as
Russia and China.
BRIC markets have underperformed the broader MSCI index of emerging
stocks in dollar terms in the past three years, with emerging markets in
turn lagging developed markets.
NO MORE CIVETS
In another sign of acronym anxiety, HSBC closed its CIVETS fund last
year, leaving no managers tracking another group of emerging markets -
Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.
Both the BRIC and MINT groupings focus on demographics - countries which
are going to grow rapidly by the middle of the century, due to their
This is an attraction of frontier economies - those which are at an
earlier stage of development than established emerging markets. One such
is Nigeria, whose stock market has been an extreme outperformer,
doubling in value last year.
But relying exclusively on demographics to make investment decisions is
risky, says Andrew Brudenell, frontier fund manager at HSBC Asset
Instead, investors should look at countries with weaker corporate
regulation and where relatively low levels of goods and services are
available, offering potential for growth.
These factors should produce the best returns on company earnings.
"Demographics are definitely one of the (investment) criteria, the
others are also criteria," Brudenell said. "We would not necessarily
decide MINT are interesting countries to invest in, there are lots of
Nigeria is at an earlier stage in the development cycle than the others.
According to IMF estimates, its per capita gross domestic product (GDP)
was about $2,800 last year measured by purchasing power parity. That
compares with around $5,000 for Indonesia and more than $15,000 for
Mexico and Turkey.
Turkey is the country most out of kilter in stock performance terms. It
has been hit by weakness of its currency as foreign investors pulled out
before the U.S. Federal Reserve begins scaling back its bond-buying
this month, a program that had depressed yields in U.S. markets and
encouraged investors to seek higher returns in riskier assets.
The Turkish stock market has underperformed even the BRICs in dollar
terms in the last three years. The corruption inquiry, which led to the
resignations of government ministers, aggravated the problem.
"Turkey remains a long-term investment opportunity but in the short term
remains quite risky," said Mauro Ratto, head of emerging markets at
As with Turkey, investors are wary of political risk in Nigeria before
the next year's elections and amid uncertainty over whether President
Goodluck Jonathan will run.
Whatever their differences or similarities, the danger with all emerging
markets is that their performance is not always dictated by local
stories, but by the global economic outlook.
"These countries do not have an independent monetary cycle," said Bill
O'Neill, chief UK strategist at UBS Wealth Management. "In these
environments, emerging markets do struggle short term."
Jim O'Neill said investors had got the wrong end of the stick by banking
on the BRIC. "It is very important for me to emphasize, being Mr. BRIC,
that I created the BRIC as an economic concept, not as an investment
theme," he said.
The same went for the MINT grouping, said O'Neill. "Each of the four
MINT (economies) make up more than 1 percent of the world's GDP, except
Nigeria - which has the best potential to make up 1 percent of GDP," he
And as always, timing is vital with investing. While Goldman's BRIC fund
has fallen in the past three years, it is up 26 percent since its
launch almost eight years ago.
"If you invested in the BRICS in 2008 for the first time, you would not
be very happy. If you had invested in them in 2000, you would be very
happy," he said.
(Additional reporting by Sujata Rao; editing by David Stamp)
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