News Round Up
More interest rate rises coming; BRIC funds worth a look at.
Monday, July 26th 2010, 7:20AM
Economists and market say interest rates up this week
Reserve Bank governor Alan Bollard will probably raise interest rates next week, despite recent data, particularly on the housing market, retail spending and inflation, being softer than expected. [Read On]
BRIC funds are quickly becoming the rising star of the equities market, according to the latest information from HSBC Global Asset Management.
In the latest edition of Investment Intelligence, BRIC funds have shown to generate an annualised return of 23.4% over the past five years in comparison to 16.9% for emerging market equities over the same period of time1.
HSBC manager Private Clients Glen Tonks says BRIC funds are worth looking at for investors who are seeking aggressive growth opportunities as they have, on average, outperformed other markets over the past five years.
"As money moves from developed to higher growth emerging markets, BRIC markets could benefit. Particularly as the debt crisis in Europe intensifies, it is even more likely that the divergence in growth outlook between developed and the emerging markets will become even more pronounced," Tonks says.
"The BRIC markets, Brazil and Russia in particular, account for the lion's share of global commodities. As commodity demand and prices are expected to rise as manufacturing recovers, the BRIC markets are set to benefit," Tonks says.
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