Notice

[Business] TICKs to replace BRICs in emerging market indices
Date
2016.02.02



A smartphone flashes on the screen at a Samsung showroom.


"The BRICs are dead. Long live the TICKs."


 On Jan. 28, the Financial Times reported that the quartet of Brazil, Russia, India and China that made up the BRIC index of emerging markets is being replaced by the TICKs, made up of Taiwan, India, China and Korea.


According to the Financial Times, over the past decade Brazil and Russia led economic growth in emerging markets. However, plummeting commodity prices have resulted in deepening recessions in the two countries. Reacting to the change, fund managers are eyeing tech-heavy Korea and Taiwan as replacements.


The newspaper explained that the "realignment tells us much about the changing nature of emerging markets -- and the world in general -- with services, particularly technology, to the fore and trade in physical goods, especially commodities, in retreat."


 Copley Fund Research's average emerging market equity fund now has a 54 percent weight in the TICKs, up from 40 percent in April 2013.


According to data provided by Copley Fund Research, a company that tracks some 120 emerging market funds that have combined assets of around USD 230 billion, the average emerging market equity fund now has around a 54 percent weight in TICKs. This is a rise from the 40 percent seen in April 2013.


As of last December, 63 percent of funds had at least 50 percent of their emerging market assets invested in TICKs. Only 10 percent had over-exposure in the BRICs.


Finally, it was reported that of the 120 funds monitored by Copley, the two emerging market stocks most commonly owned belonged to Korea's Samsung Electronics and to Taiwanese chipmaker TSMC.


By Lee Hana
Korea.net Staff Writer
Photos: Yonhap News
hlee10@korea.kr