Expect some of the CIVETS economies (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) to be among the world’s hottest markets in the decade to come. They have the potential to generate the same kind of windfall wealth as the BRIC markets of Brazil, Russia, India and China did over the last 10 years – but only if you pick the right markets at the right time.
It’s been almost a decade – 2001, to be exact – since Goldman Sachs Group Inc. (NYSE: GS) economist Jim O’Neill conceived the “BRICS” acronym as a marketing vehicle that would convey the exciting investment potential of four key emerging markets (Brazil, Russia, India and China).
O’Neill is back – with a new list and a new acronym: The “CIVETS.” Given how much money investors have made from the BRICs, that suggests the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) deserve a closer look. Potentially, they may be the great growth markets of the new decade – or not!
O’Neill’s thesis is that growth is now spreading beyond the BRICs, whose stock markets have been pretty heavily explored at least by institutional investors, and that the CIVETS economies are the next chunky economies where growth seems likely and there is money to be made. Personally, I would buy Chile (nyse:ECH(ETF)) before any of them. But I suppose O’Neill would complain that the Chilean market was not big enough for the titanic wealth of Goldman Sachs!
All the BRICs would have made investors good money in the 2001-2010 time frame. Even so, I would have invested neither in Russia under Vladimir Putin, nor in Brazil until about 2006: The risks in both places were too high for the rewards. But I would have invested modestly in China as far back as 2001. And I did invest – very profitably – in India.
Like the BRICs, the CIVETS don’t offer a sure-fire recipe for investment profits. All the same, I think we’d be foolish not to look at possibilities in Colombia and Indonesia, and perhaps even Turkey, for now. And don’t forget about Vietnam, which will be very interesting when it opens further.
World Market ETFs
Symbol Price Change 52-Wk
Mexico (EWW) 50.63 0.36% 44.37%
South Korea (EWY)48.36 1.02% 38.63%
Brazil (EWZ) 66.42 -0.76% 37.01%
Singapore (EWS) 12.02 0.54% 35.81%
Australia (EWA) 20.73 0.53% 29.91%
Israel (ISL) 14.10 -0.49% 27.95%
South Africa (EZA)57.04 -0.61% 27.28%
Canada (EWC) 26.31 -0.49% 25.75%
USA (SPY) 109.65 -0.01% 22.83%
Russia (TRF) 17.75 0.51% 21.66%
Taiwan (EWT) 12.14 0.83% 18.94%
India (IFN) 31.20 -0.64% 10.40%
China (FXI) 40.48 -0.93% 10.00%
Japan (EWJ) 9.67 0.73% 5.94%
More details here: My Own Portfolio