BRIC: A Brief Introduction to Investing

Brazil, Russia, India and China. You’ve probably heard of every country. Some more, some less. What do they have in common? These are attractive countries for investors.

They meet the hallmarks of growing economies in which to invest. Many investment companies offer a fund that invests in selected companies that do business in these countries.

To make it easier to understand why it is advantageous to invest in countries that belong to the BRIC group (Brazil, Russia, India, China), it is necessary to mention their economic potential. Each of these countries is at a transition between a developing and a developed country.

The world is divided into three zones. Surely you’ve heard of Third World countries, which include mostly African states. However, there are also countries of the Second and First Worlds. The first world includes countries such as the United States, Canada, Australia, Japan, and the European Union. In the other world there are post-Soviet countries (for example, the Czech Republic, Poland, Slovakia, Lithuania, etc.). In addition, all BRIC investment group countries are included in the Second World countries.

BRIC countries as future global players

Each of the BRIC countries still has a long way to go. All BRIC states are on their way to joining the community of first world countries. Their economic potential is more than favorable. Before joining this prestigious club, they will have to increase their gross domestic product, which also brings with it an increase in the level of the population.

Raising living standards goes hand in hand with increasing consumption. This is given by several indicators. Everyone living in Brazil, Russia, India or China will want to drink clean water, have nice clothes, call a mobile phone, drive a car and equip their household with appliances that will make their lives easier.

As wealth grows, he can afford all this. However, in order to kick-start consumption growth, countries’ economies need start-up capital. It is formed both in the country (eg state budget, private investors), but also abroad through investment companies, which for each country and each sector of the economy establish several mutual funds, which they offer to their customers.

It is a bit of an exaggeration to say that our money will help some Indian in his journey to wealth. Investors investing through mutual funds receive returns from their invested money. It will take a good number of years for all Indians to buy their own car.

Invest in the BRIC countries prudently

However, each of the BRIC countries has its own requirements, which are known to investment companies. They choose the structure and portfolios of their mutual funds accordingly. In some countries, investment in transport infrastructure or utilities (collective name for water, electricity and gas companies) is needed. Read more: The amount of fees when investing in mutual funds

The plethora of investment opportunities is thus wide enough. A lot of money will be needed to start growth. It will be in the tens of trillions of US dollars, and that is still a modest estimate.