We all have heard of the BRIC nations, a term coined by Jim O'Neill the chief economist at GS about 9 years ago. Even though initially intended as an academic paper the term has sits firmly in everyday investment parlance. We have seen the equity markets in these countries perform well over the last decade. It does not come with any surprise given the geographic vastness of the nations, the increasing population coupled with greater market access to foreign institutions and the key role the four countries play in this economic environment. So what is the NEXT 11?
Late in 2005 encouraged by the success of the BRIC nations Jim brought together a diverse group of countries which could potentially rival the G7. They include Pakistan, Indonesia, Mexico, Philippines, Egypt, Iran, Nigeria, South Korea, Iran, Turkey, Vietnam and Bangladesh. GS does recognize that all these countries will not have the same impact as the BRIC nations but allot of them have had promising returns and developed potential in the last few years to challenge the G7 by 2025. The diversity of this group brings its own challenges, countries such as South Korea have a relatively well maintained forex, equity and investment market compared to Pakistan which has a fairly liquid equity market but still in need of reform. GS recognizes each individual countries challenges and therefore look upon the N-11 as a dream grouping. However it is a grouping that investors have started taking seriously. You can already invest in the N-11 through the BNP Paribas' Paris based Easy ETF ( only accesses 8 of the eleven to date). Castlestone Management a London House is to launch a fund focused solely on this N-11 by the end of the year.
With double digit gains in 7 of the 11 countries and all of them except Vietnam being in positive territory maybe the timing is right? Some of the risks may put of investors but thats why there are far more opportunities for those who do invest. Similarly, for those already invested in BRIC nations or even those who feel they have missed the boat the N11 is the group to chose from.
http://www2.goldmansachs.com/ideas/global-economic-outlook/n-11-acronym-doc.pdf
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