Investors take a dim view of success in allocating funds into BRIC countries (a group of five fast developing countries – Brazil, Russia, India, China, and the South African Republic). As soon as the U.S. Federal Reserve System starts threatening to cut off incentives, the BRIC asset class records outflows. Over a period from 2005 until 2012, the investment amount totaled approximately $52 billion. However, since the turn of the year, the capital outflows withdrawn out of the BRIC reserves have reached nearly $14 billion, that makes up 27% of the total injections for 7 years. The stock index of these countries has dropped by 12%, the government bonds have gone down by 0.6%, the currencies of the countries–counterparts have sunk in value by 4.1% on average. Besides, each country comes across its particular hardships, so, by and large, a bumpy economy scares off investors. For instance, the major problem in Russia is declining oil prices. Brazil is facing the rapid inflation growth. In India, the rupee has hit the record minimum versus the U.S. dollar (1 to 60). Starting this year, China has been displaying the weakest economic growth figures since 1990; the reported export data also indicate certain problems on the market. The loss of interest could have been caused by the long-lasting anticipation of positive results that investors unfortunately have not gained so far. “Every decade, there’s a theme that captures investors’ imagination - the 1970s was about gold, 1980s was all about Japan and 1990s was about technology companies,” Ruchir Sharma, Head of Emerging Markets Equity and Global Macro at Morgan Stanley Investment Management, explained the state of affairs. “Last decade it was about the BRICs. That theme has basically run its course.”
