If you had an all BRIC portfolio....

CFA General
#1

If you had an all BRIC portfolio. The rules are that you can only invest in those 4 markets and you must be 100% invested. How would you allocate your assets? In percentages? Why?

#2

All in B, baby! Because Deus e’ Brasileiro! More seriously, can you do long-short using indices? I’ve been meaning to figure out this problem too. I might start by throwing stuff into an optimizer and see what results come out, then adjust tactically based on medium term economic forecasts and an analysis of regulatory structures. I don’t know what numbers they would be, but I am sure that I would probably be overweighting Brazil, underweighting Russia, and not sure how to handle China and India. Also, if you break things down by country/sector, it might be more interesting. Not sure the market depth is there for many industries, and in some places you can’t short anything but an index future.

#3

Overweight Russia and China, underweight India and Brazil. I don’t think the culture in India and Brazil isn’t nearly as go getter entrepreneurial as Russia and China. My bet is on Russia and China for the long term.

#4

I would go all into B, with a heavy focus on Telecom, and mainly AC/DC power.

#5

You’d be friggin hurting at the moment…

#6

Danteshek Wrote: ------------------------------------------------------- > Overweight Russia and China, underweight India and > Brazil. I don’t think the culture in India and > Brazil isn’t nearly as go getter entrepreneurial > as Russia and China. My bet is on Russia and > China for the long term. Agree on the culture issue, but both Brazilians and Indians can be hard working. I just think Russia and China are very Black Swan prone. Russia’s great until you become profitable and your stuff confiscated by some guys in power. China’s nice until there’s starvation in the countryside and the PLA gets called out to re-establish order.

#7

You should buy some EFA. It’s not BRIC but it’s already down 22% for the year. It hardly ever goes down that much in any given year so I’m betting it won’t go down a whole lot more. Taken a step further, if it isn’t going down it will be going…?