Goldman Sachs declares BRIC investing is obsolete
After years of hype and hope, Goldman Sachs has officially declared that BRIC investing is dead. The term BRIC, which stands for Brazil, Russia, India, and China, was coined in 2001 by former Goldman Sachs chief economist Jim O’Neill to describe the four emerging market economies that were expected to drive global growth in the 21st century.
However, a lot has changed since then. Brazil and Russia have been hit hard by political instability and economic crises, while China’s growth has slowed significantly in recent years. India remains a bright spot, but even its economy has been sluggish in comparison to expectations.
Goldman Sachs’ decision to abandon BRIC investing comes after years of disappointing returns for investors who bet on these emerging markets. The firm’s BRIC investment fund, which was launched with much fanfare in 2006, has underperformed its benchmark index by a wide margin.
In a recent report, Goldman Sachs analysts wrote, “The era of outperformance for BRIC countries is over.” They cited a combination of factors, including slowing growth, political uncertainty, and rising debt levels, as reasons for their pessimism about the future prospects of these economies.
While BRIC investing may be officially dead at Goldman Sachs, that doesn’t mean that emerging markets as a whole should be written off. The analysts pointed to a new group of emerging market economies, dubbed the “Next Eleven” or N-11, which they believe have more potential for growth in the coming years.
Investors who are still interested in emerging markets may want to consider shifting their focus to countries like Indonesia, Mexico, Turkey, and South Korea, which Goldman Sachs believes have more promising growth prospects than the BRIC countries.
Overall, the demise of BRIC investing at Goldman Sachs serves as a cautionary tale for investors who put too much faith in hot trends and buzzwords. The world of investing is constantly evolving, and it’s important to stay attuned to changing economic conditions and market dynamics in order to make informed decisions.
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