CIVETS, BRICs and MINTs
We recently asked whether MINTs were the next big investment opportunity, following a briefing note from Fidelity International.
Now we see that HSBC Global Asset Management has launched a CIVETS fund.
Not to be confused with the small, lithe-bodied, mostly arboreal mammal native to the tropics of Africa and Asia, CIVETS is a grouping acronym coined by Robert Ward, Global Forecasting Director for the Economist Intelligence Unit (EIU) in 2009.
The term was later compared by Michael Geoghegan, President of HSBC to the the civet, a carnivorous mammal that eats and processes coffee cherries to then dispose them in a transformed coffee bean that is considered very valuable and sells at high market prices.
From an investment perspective, the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) are a group of favoured emerging market economies. They are favoured for several reasons, including their dynamic and diverse economies and young growing populations.
The new HSBC GIF CIVETS fund targets long-term returns from capital growth and income by investing in a diversified portfolio of equities from the stock exchanges of the CIVETS countries. It also has the ability to invest up to 25% in companies from non-CIVET nations.
This is unlikely to be a fund which will appeal to most investors.
It is priced in US dollars and has a minimum investment of $5,000 for retail investors, with a 1.75% annual management charge placing it at the pricier end of the fund pricing spectrum.
CIVETS (much like BRICs or MINTs) is a great marketing acronym but not the basis for making rational investment decisions.
Investments in equities from CIVETS nations might make up a part of a well-diversified investment portfolio although investing in a brand new fund is rarely a good idea until it has established a solid performance track record.
Photo credit: Flickr/mcfarlandmo