As a glutton for investment punishment, I return to the vexed subject of emerging market equities and bonds. In July I suggested that a contrarian investment approach to emerging markets could be profitable, and I stand by that today. One area within emerging markets that investors may want to consider is the BRICS currency.
The BRICS countries (Brazil, Russia, India, China, and South Africa) are working on establishing a new reserve currency to better serve their economic interests, according to Pavel Knyazev, the head of research at InstaForex Group. The idea is to create a currency that is less vulnerable to the whims of the US dollar and other major currencies.
In 2021, the BRICS countries contributed 24.44T to the world economy, representing 24% of the total world GDP. This is a significant portion of the global economy, and investors who are looking to diversify their portfolios may want to consider investing in BRICS currency.
Since the acronym was coined, much has changed in some of the countries that make up the 'BRICS'. India, in particular, has emerged as a standout country with a lot of potential for growth. The Indian economy is expected to grow at a rate of 8.5% in 2021, which is higher than the growth rates of China and other emerging market countries.
Investing in BRICS currency can be a profitable venture, but it is not without risks. Emerging market investments are generally considered to be more volatile and unpredictable than investments in developed markets. Political instability, currency fluctuations, and economic turmoil are all risks that investors need to consider before investing in BRICS currency.
Data reveals “mind-blowing” potential for BRICS economies to outperform the United States; Global investors buy record $21 billion worth of emerging market bonds in November; and rising inflation is driving emerging market central banks to raise interest rates. All of these factors can impact the performance of BRICS currency, and investors need to stay informed about these factors to make informed investment decisions.
One way to invest in BRICS currency is through a BRIC ETF (exchange-traded fund). A BRIC ETF invests in stocks and listed securities associated with the countries of Brazil, Russia, India, and China. This provides investors with exposure to the BRICS currency without having to invest directly in individual stocks or bonds.
In spite of turbulence in traditional finance, creativity in crypto has found a new boon in the form of inscriptions called Ordinals. While most investors were fixated on Jerome Powell & Co. this week, trying to gauge the Federal Reserve's next moves in light of recent banking scandals, some were quietly exploring the potential of blockchain-based inscriptions for emerging market currencies.
In conclusion, investing in BRICS currency can be a profitable venture for investors who are willing to take on the risks associated with emerging market investments. With the potential for strong economic growth and a new reserve currency on the horizon, now may be a good time to consider investing in BRICS currency through a BRIC ETF or other investment vehicle. However, investors should be sure to do their due diligence and stay informed about the risks and opportunities associated with BRICS currency investments.
Ticker: BRIC ETF, USD, INR, RUB, ZAR
