Investment
How to invest in BRICS markets: a calm trail guide
A practical guide to ADRs, ETFs, direct entry and the FX risks of investing in India, China, Brazil, South Africa and Russia.
Investing in the BRICS economies is far more accessible than it seems, thanks to a range of listed vehicles. The starting point is the difference between the largest economies, which rest on domestic demand and scale, and the rest.
The main routes for a foreign investor are ADRs and GDRs (receipts that let you hold a foreign share), ETFs that hold whole baskets, direct access for those who do the paperwork, and a set of regional listed funds.
For most people an ETF is the realistic first step: it spreads money across many names and lowers the single-stock risk of a market the draws a few giants. A single country ETF is simpler to digest than a bespoke "BRICS ETF".
Of all the risks, currency is the one to consider: buying those assets can add the Brazilian real or the South African rand to your return, on top of the market move itself.
Key facts
- ADRs / GDRs: Receipts that let you own specific overseas blue-chips.
- ETFs: The simplest, cheap, diversified access for most investors.
- Direct entry: Via FPI, Stock Connect, QFII or local brokers, with rules varying.
- Currency risk: The real, rand, rouble and rupee can swing the return.
Frequently asked questions
What is the easiest way to invest in BRICS?
For most, a regional or single-country ETF is simplest. ADRs let you buy a specific company without opening a foreign account.
Do I need to watch the FX?
Yes, especially for BRL, ZAR and RUB, where the currency carries a large share of the return.