The Bloomberg Commodity Index reached a five-year low this month and is down 6.1 percent in December, the sixth straight monthly decline and the longest slump since 2009. Oil has slid about 45 percent this year, poised for the biggest drop since 2008.
BRIC Funds
Falling oil and metal prices may boost economic growth and lower inflation in India and China, two of the world’s three biggest importers of crude in 2013. Commodities account for roughly half of Brazil’s exports, while Russia’s government gets about 50 percent of revenue from energy industries.
The BRIC nations still work as an investment theme, according to Mark Mobius, who oversees about $40 billion as the executive chairman of Templeton Emerging Markets Group, including BRIC equity funds.
“Even with major economies like Brazil and Russia slowing down, emerging-markets growth in 2015 is expected to be comfortably in excess of that achieved by developed markets,” Mobius said by e-mail on Dec. 19. “There are opportunities in all BRIC markets,” although Russian sanctions “create difficulties,” he said.
O’Neill, who stepped down as chairman of Goldman Sachs’ asset management unit last year, says the BRIC grouping should be understood as an economic concept. His colleagues at Goldman Sachs estimated in 2003 that the nations may join the U.S. and Japan as the world’s biggest economies by 2050.
“It just so happens that it became a big investment theme,” O’Neill said by e-mail from London.