How to Trade the BRICs with ETFs

You’ve heard of the BRIC countries, right? Brazil, Russia, India and China are the four top emerging markets. For various reasons, all have much better long-term prospects than most of the so-called “developed” markets.

Now there’s a way you can trade the BRIC stock markets with some new leveraged ETFs — but you need to be careful.

More on this opportunity in a minute. First, let’s quickly review what all the excitement is about …

BRICs Are the Future!

I don’t have to tell you that the U.S., Europe and Japan are in dismal economic condition. Getting out of the mess we’re in is going to take time. Possibly a very long time.

The world isn’t going to sit still and wait for us. Quite the opposite — countries that have lagged behind are catching up. The BRICs are leading the way.

– Brazil dominates Latin America and is rich in natural resources. Brazil accounts for most of the world’s soybean trade and about 80 percent of global orange juice production. More important, Brazil is actually energy independent — thanks to ethanol and abundant offshore oil reserves.

– Russia is reaping the reward of still-high energy prices. The former Soviet republic has the world’s largest natural gas reserves and massive gold deposits. Russian cities are bustling with commercial activity

– India has a huge and growing English-speaking workforce. Over the last twenty years, India’s growth rates have skyrocketed. Goldman Sachs projects that India’s economy will overtake France by 2020 and Japan by 2035.

– China is becoming nothing less than the world’s largest market for pretty much everything. The sheer scale of the growth is mind-boggling. The Chinese economy is seventy times bigger than it was in 1978. A vast industrial base is transforming the country in unimaginable ways.

You can see where this is going. The BRIC countries are exploiting our weaknesses and setting themselves up to own the 21st Century, economically speaking.

(By the way, you can read a lot more about the BRICs in my free special report. Click here to download your complimentary copy of Meet the BRICs: Economic Leaders of the Future.)

Of course, the BRIC countries aren’t the only emerging markets. Each is surrounded by smaller countries and ever-growing trade relationships. You can find opportunities in places like the Next 11, too. The four BRICs are, however, the biggest emerging markets. They can’t be ignored any longer.

Trading BRICs with ETFs

Even if you’ve never been outside the U.S., you can still get in on the BRIC action. Today’s ETF products make it easy.

One possibility is to buy ETFs that focus on each of the BRIC countries individually. Numerous ETFs cover Brazil, Russia, India or China — too many to list here, in fact.

An easier way is to get all four BRIC markets in one package. These ETFs allow you to do it all in one quick step.

– SPDR S&P BRIC 40 ETF (BIK)

– iShares MSCI BRIC Index Fund (BKF)

– Claymore/BNY BRIC ETF (EEB)

Each of these ETFs tracks a different stock index, so the results are also slightly different. All offer a fast and easy way to get started in emerging markets investing.

If you are more experienced and/or short-term oriented, you might want to take at some new funds from Direxion. Launched just last week, these are the first leveraged and inverse BRIC ETFs:

– Direxion Daily BRIC Bull 2x (BRIL)

– Direxion Daily BRIC Bear 2x (BRIS)

Before you try these last two, read my articles on Inverse ETFs and Leveraged ETFs. Funds of this type are often misunderstood. Here’s a hint: Pay attention to that word “Daily.” Direxion put it in the names for a very good reason.

Is now the time to buy the BRICs? Maybe, maybe not. Anything can happen in the short run. But I’m confident that 20-30 years down the road, the BRICs will have shown massive growth compared to the U.S. That makes them an opportunity worth considering.

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.