Heard of emerging markets, or BRICS? If you live in South Africa you may not realise that you are in fact a resident in an emerging market. 👀
An emerging market refers to an economy of a country that is in the process of rapid growth and development, often characterized by increasing industrialization, urbanization, and rising incomes. These markets are considered to be in transition from developing to developed status.
The Satrix MSCI Emerging Markets Feeder Portfolio is an exchange-traded fund (ETF) in South Africa. Its goal is to give investors a total return by considering both capital and income returns. It aims to match the performance of the MSCI Emerging Markets (IMI) index.
The MSCI Emerging Markets Index follows the performance of medium and large-sized stocks in 25 countries.
Disclaimer: The holdings may not be limited to the logos on the image and may change. The use of logos are for educational purposes only.
Here’s the link to the underlying asset, and a tool to compare ETFs on EasyEquities here.
The biggest players in the emerging markets
The BRICS alliance represents a group of five major emerging market economies: Brazil, Russia, India, China, and South Africa. The term was coined in 2001 by Goldman Sachs economist Jim O'Neill to represent these countries. These countries are seen as important players in the global economy due to their large populations, substantial natural resources, and growing economic influence.
While BRICS is not an official index or classification, the term is commonly used in discussions about emerging markets and economic cooperation among these countries. It highlights their shared interests and potential for collaboration in various areas, such as trade, investment, and development initiatives.
Ambassador Anil Sooklal, South Africa's BRICS representative, has recently confirmed that over 30 countries have informally expressed their interest in joining the BRICS alliance. These countries include Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe.
Satrix MSCI Emerging Markets Feeder Portfolio
This ETF holds a diversified portfolio of stocks in different countries that have the potential to benefit from the Chinese reopening. China is a major trading partner to virtually all other emerging market economies and accounts for about one-third of market capitalisation in most emerging market indices, according to Morgan Stanley. As a result, investors place great emphasis on the country when allocating capital. In addition, the bank believes the market is underestimating the implications of the reopening.
Morgan Stanley is bullish on China and remains optimistic about spillover effects to emerging market economies that are exporters of commodities. The reopening in manufacturing will amplify demand for oil as China relies heavily on the commodity for manufacturing.
Manufacturing will also boost demand for precious metals such as gold and platinum, in which emerging markets play a crucial role." Read more here.
The Satrix MSCI Emerging Markets Feeder Portfolio ETF is available in both EasyZAR and EasyTFSA wallets.