Goldman Sachs Asset Management has started a fund that will focus on equity investments in Brazil, Russia, India, and China. The all-cap, style-neutral Goldman Sachs BRIC Fund seeks long-term capital appreciation.
Economists at Goldman, Sachs & Co. have projected that the combined gross domestic product of Brazil, Russia, India, and China could exceed that of the G6 by 2040.
The BRIC concept was first identified by Goldman in 2001 in a research paper, "Build Better Global Economic BRICs," that said these countries would be the "economic powerhouses of the future."
Maria Gordon, Goldman's executive director and co-head of global emerging equity markets, said during a conference call that the firm has been investing heavily in these four economies and other emerging markets for the past five years.
The new fund, offered in A and C class shares with a minimum investment of $1,000, is managed by four portfolio managers within Goldman's global emerging markets equity team. This team also manages the Goldman Sachs Emerging Markets Equity Fund; it oversaw $1.9 billion of assets in all as of June 30.
Gordon said that Goldman, which managed $571 billion of assets on Feb. 24, launched a fund in Luxembourg in January that focused on Brazil, Russia, India, and China. The BRIC Fund is an "ultra" version of the one launched in January, she said.
Because the new fund invests in fewer countries than the Goldman Sachs Emerging Markets Equity Fund, there will be higher volatility, Gordon said. But the economies of Brazil, Russia, India, and China have better potential for alpha generation, she said.