Investopedia: What's Happening To The Best Trades Of Our Lives?

Nobody is sounding the bells yet for the emerging markets, but a curious thing has happened on the road to "BRIC will make you rich!" So far this year, many of the most attractive emerging markets are not actually doing well at all. Ups and downs are par for the course with all investing, and especially so in emerging market investing, but it is interesting to step back and see how many of the most attractive long-term stories are working out today. 

Brazil - Rates Shimmying Upward
Just in time for Carnival, Brazil's central bank decided to hike rates by another 50 basis points, moving the benchmark rate to 11.75%. Just as it is often said that investors should not "fight the Fed," investors in Brazilian equities have had to swallow hard as Brazil's government tries to find the right path between inflation and growth.

Even though commodity prices, a major component of Brazil's economy, have been strong both under ground (copper, iron, and gold) and above ground (soybeans and other agricultural products), that has not helped the market so much. The iShares Brazil Index ETF (NYSE:EWZ) has lost almost 4% year-to-date as of this writing, and many riskier ETFs have had it worse. The Market Vectors Brazil Small-Cap ETF (NYSE:BRF) has dropped 8.6%, while the thinly-traded Global X Brazil Consumer (Nasdaq:BRAQ) and Global X Brazil Financial (Nasdaq:BRAF) have fallen 12% and 9% respectively. For those who think investing in Brazil is not quite risky enough, the ProShares Ultra Brazil (NYSE:UBR) are down 8.6%. Oddly enough, while rates keep climbing, the EGShares Brazil Infrastructure Fund (Nasdaq:BRXX) has only seen declines of about 1%.


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http://stocks.investopedia.com/stock-analysis/2011/Whats-Happening-To-The-Best-Trades-Of-Our-Lives-BRF-EWZ-FXI-EPI-IDX-TUR-VNM0304.aspx

Forget BRIC, It's Time For CIVETS

Wall Street loves sound bites and handy acronyms. Whether it is ROE, NPV or NAV, there is no shortage of handy terms. For growth-oriented investors, BRIC has been one of the most important acronyms of the past ten years. Encompassing the dynamic economies of Brazil, Russia, India and China, BRIC was a guidepost for many investors and there is no questioning the strong stock performance of this group (particularly China and Brazil). (Historically, international investing has worked out well for investors, but this may no longer be the case.

Things change, though, and it may be time for investors to pay more attention to a new name. A civet may be an odd-looking creature (imagine a cross between a raccoon and a cheetah), but the CIVETS could be the next major destination for international investing.

Meet the CIVETS
CIVETS is an acronym, reportedly coined by Michael Geoghegan at HSBC (NYSE:HBC), for Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. Investors may think of this as a second-generation of emerging economies, as these countries generally have fast-rising (and young) populations, relatively well-established financial infrastructure, internal stability and a pathway towards significant economic growth and potential co-leadership in their economic spheres.


Please click the link for the full text:
http://financialedge.investopedia.com/financial-edge/1010/Forget-BRIC-Its-Time-For-CIVETS.aspx

Please note - I ordinarily also would have mentioned Turkcell (NYSE: TKC) as part of this group, but I own Turkcell in my own accounts, and therefore cannot mention it within Investopedia articles.

Vietnam On My Mind

Generally speaking, I am not a big ETF fan. It is not so much that I do not like the concept, but rather I just usually have the belief that I can do better than a particular index or collection of stocks. So, it is a mix of pride, arrogance, stubborness, and confidence that gets in my way. Still, I do appreciate that ETFs can let us invest in concepts that might otherwise be beyond the capabilities of a regular retail investor.

I mention this all as prelude because I find myself taking another look at the Market Vectors Vietnam ETF (NYSE: VNM) today.

I am a long-term bull on Vietnam, as I see it as something of a "China Jr." - a centrally-controlled export-driven economy with low labor costs. Unfortunately, current conditions are a little worrisome.

Vietnam just recently sprang another devaluation on the market, its third since November. That is going to raise concerns about inflation and it does no favors relative to the company's foreign currency debt burden. Still, the government realizes that export growth is paramount, so they are doing what they can to keep their exports looking nice and cheap relative to other locales in SE Asia.

Vietnam's market is still in its infancy - the two main markets have a combined market valuation around $35 billion (almost the same size as EMC (NYSE: EMC) or Lilly (NYSE: LLY)) and there are scarcely any Vietnamese companies that are well-known outside of SE Asia. In addition, there are some of the standard investing limitations that you might expect - foreign investors have to comply with some limits in the banking and telecom sector and moving money in and out of the country is not quite as easy as it is with Japan or the UK.

If that was not enough, there is the fact that Vietnam is basically in a bear market now (down nearly 20% from the high in May) and is down more than 60% from its all-time high. Oh, and the country needs to do more on the domestic policy front to get the economy on a sustainable trajectory.

And yet ... and yet, I am still intrigued.

Maybe Indonesia is the better bet today, as it is certainly a more developed economy at this point. Or perhaps the Philippines is finally going to pay off on decades of hopes and expectations that it will be the next tiger. And what about Sri Lanka now that a devastating civil war is over?

I am a big fan of what I call second-tier tigers. Everybody knows all about China, Brazil, and India, but how many investors take the time to bone up on Vietnam, Turkey, South Africa, or Poland? In my experience, you make more money if you invest *before* a country is designated as the next go-to area.

With that in mind, I may just have to start buying some of this Vietnam ETF soon. I do think Vietnam is a good place to be long-term, and there just are not any other ways to play that theme right now.

Additional info: 
Indonesia -  Aberdeen Indonesia Fund (IF), Market Vectors Indonesia (IDX), iShares Indonesia (EIDO)
Turkey - iShares Turkey (TUR)

South Africa - iShares South Africa (EZA)
Poland - iShares Poland (EPOL)