The Bric Rebound in 2009: Sources of Return, October 2009

Abstract

In this Research Bulletin, we take a look at the performance of the BRIC countries - Brazil, Russia, India, and China - in 2009. These equity markets have experienced significant gains since the start of the year. We decompose the performance of the MSCI indices for these markets using the Barra Global Equity Model (GEM2). While many investors often think of investing in BRICs as pure country plays, there may be significant industry biases that drive performance at certain times. Attribution using a factor model can help disentangle pure country, and industry and style effects so that investors can understand where performance is truly coming from. For BRICs, the country effect continues to dominate these markets, but other effects should not be ignored.