TradingMarkets Everything You Need to Know About Trading ETFs: Brazil, Russia, India, China

The volatility of an emerging market and the upside of huge middle classes yet to be born … that describes what many traders, investors and analysts see in a quartet of developing nations called the BRIC countries over the course of the 21st century.

B is for Brazil: One of the most widely traded exchange-traded funds for ETF traders and investors who are looking for exposure to the Brazilian stock market is the iShares MSCI Brazil Index ETF, EWZ
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. In addition to giving traders and investors exposure to a variety of Brazilian stocks, EWZ also provides exposure to the international energy market, with most of the ETFs holdings consisting of Brazilian energy and industrial materials stocks like Petrobras and Companhia Vale.

R is for Russia: There are a number of closed-end funds that invest in Russian stocks. However the Market Vectors Russia ETF, RSX
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, is one of the most widely-traded exchange-traded funds for traders and investors. Like the Brazilian ETF, the RSX also includes a heavy weighting of energy and industrial materials stocks.

I is for India: The India Fund, IFN
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, is the choice of many traders and investors when looking to invest in Indian stocks. IFN, however, is a closed-end mutual fund run by the Blackstone Group, rather than a true exchange-traded fund.

Options for traders and investors looking for ETFs based on India stocks include the PowerShares India Portfolio ETF, PIN
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and the WisdomTree India Earnings fund, EPI
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.

C is for China: China is in many ways the classic example of a BRIC country. There is no doubt that much of China is still very much part of the developing world. But there is nothing “third world” about China’s growing leadership in Asia – to say nothing of its historical role as one of the oldest civilizations in the world.

The iShares FTSE/Xinhua 25 China ETF, FXI
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is one of the more widely traded ETFs for traders and investors looking for investment or trade in Chinese shares. The ETF invests in a number of Chinese industries across a variety of sectors, with the largest holdings in financial services, telecommunications and energy.

Can’t decide which BRIC country to buy? An interesting option for ETF traders and investors is to buy a basket of BRIC countries through an ETF like the Claymore/BNY BRIC ETF, EEB
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which invests in stocks from all four of the BRIC countries.

EEB is not equally weighted. As of December 31, 2008, the exchange-traded fund was most heavily weighted in stocks from both Brazil and China, with India and Russia representing less than 14%. On a sector basis, EEB holds largest percentages in energy, telecommunications and finance.

Coming Next: We’ve seen exchange-traded funds linked to stocks, commodities, currencies and entire national markets. Next on TradingMarkets Everything You Need to Know about Trading ETFs, we’ll take a look at ETFs based on fixed income products from Treasuries to junk bonds.

So be sure to stop by Thursday afternoon as TradingMarkets Everything You Need to Know about Trading ETFs returns with more of the ETFs you need to know.

According to a recent report, eight out of ten securities traded are exchange-traded funds. Want to learn how to trade them? Click here to find out what traders are saying about Larry Connors’ new book, Short Term Trading Strategies That Work: A Quantified Guide to Trading Stocks and ETFs!

David Penn is Editor in Chief at TradingMarkets.com.