Investors fled the BRICs last year as Brazil, Russia, India,
and China underperformed many of the major emerging markets, BusinessInsider
writes.
UBS analyst Nicholas Smithie and his team believe BRIC's
underperformance can be attributed to three key things:
A.
BRICs are high beta markets and are highly
correlated with one another and other emerging markets and were hurt by the
low-risk appetite environment after concerns emerged on Europe, China and the
U.S. economy.
B.
High profile corporate corruption scandals like
Sino-Forest in China and the 2G scam in India.
C.
BRICs have a larger share of energy companies 25
percent, versus 5 percent for non-BRIC nations, while the rest of the GEMs are
more tech heavy at 20 percent, compared with 5 percent in BRICs.
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