So why did the idea of grouping together the four emerging market superpowers of Brazil, Russia, India and China under the snappy and marketing-friendly acronym ’Bric’ gain such currency over the early part of this century?
Well, yes, I concede it may have had something to do with the four countries between them embodying two of the globe’s most powerful economic themes – domestic demand and commodities – but, ever since a fund manager told me an alternative theory, I have not been able to shake the feeling it may at least have been in part as a result of a necessity being turned into a virtue.
This second line of thought – possibly apocryphal, certainly cynical – suggests that cost-cutting by Western investment banks in the 1990s led to them operating just a handful of local offices within the emerging markets – say, Sao Paolo, Moscow, Mumbai and Beijing – and the rest is history. As I said, once you hear the idea, it is difficult to dismiss it entirely.
Be that as it may, the term Bric, which is generally traced back to the Goldman Sachs paper, Building Better Global Economic Brics, that was published in November 2001, has a lot to answer for in the contorting-countries-into-dodgy-acronyms department – whether it be its nearest relatives such as the Korea-enhanced ’Brick’, the Pigs-oriented job lot of euro basket cases or the next set of great investment hopes, of which the ’Civets’ of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa are or is the latest example.
It would appear vowels are the key to a good acronym – as the mother of my children discovered at a house party a good few years ago as she and some friends searched for the perfect mixer to accompany their 3am concoction of Bailey’s, rum and Pernod. As good fortune would have it, ransacking the kitchen cupboards yielded a large supply of Um Bongo – I am reliably informed they drink it in the Congo, m’Lud – and thus the ’Burp’ was born.
I am in no way suggesting that investors tempted by the Civets concept will be left nursing the sort of hangovers endured by my other half and her fellow Burp alchemists the morning after but both ideas do make me feel a little queasy.
On the cocktail front, it is because I never had much of a taste for Um Bongo while with Civets, and indeed Bric, I have never understood why the vast majority of investors would want to limit themselves to just a handful of emerging markets.
For when they go wrong – and, to take a topical example, I am not sure I would be totally comfortable having too much exposure to the ’E’ of Civets at the moment – their managers really are short of places to hide. Indeed, while we are indulging in all this wordplay, would it be unfair of me to suggest you could end up with an investment that ’Evicts’ a portion of your cash?
A bit cruel perhaps but, then again, not even the managers of the most all-inclusive and global of emerging markets funds should really take offence at the suggestion their investors could lose money, let alone those focusing on just the six countries – no matter how exciting their potential.
And speaking of that potential and of managers who fish in a far larger pool, when things go right for the Civets grouping, well, good for them – but in that event-uality I would also expect the stewards of the two global emerging markets funds in my excuse for a portfolio, Messrs Tulloch and Collings, to have bagged me a fair degree of exposure.
The Civets grouping and others ought to work nicely as an asset allocation tool for very sophisticated investors but, for the rest of us, do they represent a suitably sweet-smelling investment strategy or an altogether muskier marketing ploy?
Perhaps it all comes down to a matter of individual taste but, at the very least, investors should always be on the lookout for the ’reductio ad absurdum’ – the launch of a fund investing in the exciting potential of, say, Somalia, Uganda, Chad, Kenya, Eritrea and Rwanda.
Julian Marr is editorial director of Marketing-hub.co.uk and Thoughtleadershiplive.com