Thick as a BRIC

Goldman Sachs Asset Management (GSAM) has launched an all-cap BRIC equity fund, which will concentrate assets in 20 to 40 companies based in, or doing business in, Brazil, Russia, India and China. The Goldman Sachs BRIC Fund (GBRAX) will now be available to U.S investors–it has been available to investors offshore in Luxembourg since earlier this year.

“The term ‘BRIC’ was coined by Jim O’Neill [Goldman Sachs' London-based head of global economic research] at Goldman Sachs in November 2001,” says Maria Gordon, speaking on a July 25 conference call. Gordon, based in London, is a portfolio manager for the new BRIC fund, and executive director and co-head of GSAM’s global emerging markets equity. The other portfolio managers for the BRIC fund are: Singapore-based Kenny Tjan, executive director and co-head of GSAM’s global emerging markets equity; Richard Flax executive director, global emerging markets equity, London; and Mark Syn, executive director, global emerging markets equity, Singapore.

Younger populations and new pools of consumers are helping drive interest in BRIC investing. According to GSAM, the pool of new consumers in BRIC countries with annual incomes of above $15,000 will, by 2025, be almost twice the total population of Japan, three times the total population of Germany, and four times the total population of the U.K., France, or Italy. The four countries form natural markets for each other: “China and India are key sources of demand for natural resources; Russia and Brazil are key sources of supply for natural resources,” explains Gordon, adding that BRIC countries contributed one-third of global growth in past five yrs, according to Jim O’Neill.