If you invested in the BRIC countries last year or indeed in emerging markets generally, you are probably and rightly disappointed in the returns that you received. However, you should seriously consider giving BRIC investments another chance this year because BRIC equities are doing pretty well this year and most experts expect the trend to continue. The largest of the ETFs benchmarked on emerging market indices, the Vanguard’s MSCI Emerging Markets, was up over 11% by the end of January as compared to 5% for the S&P 500. Many experts believe that the 20% downward fall last year was not the bursting of a price bubble but rather a long overdue correction. As a result of this correction, BRIC equities are expected to be among the best performers of 2012. This is why you should seriously consider adding to your portfolio during the current year.

Naturally, what happened last year could happen again this year but experts believe that this will not be the case. A combination of competitively strong GDP growth and more realistic valuations will continue to make the BRIC economies attractive investment destinations. Further, these countries have demonstrated their ability to control inflation without curtailing the growth of their economies. The opportunity arises because despite the recent rise, BRIC equities are still trading at valuations that are well below their historical levels. These equities are currently trading at 10 times earnings as against a historical level of up to 13 times earnings.

However, you should remember that further negative complications in the European debt crisis as well as other negative developments in the global economy could dampen these prospects at least temporarily. These potential problems could include restrictions on credit hampering growth in China, continuing food inflation in India and an unanticipated slowdown in the global economy. Realistically, you should also expect lower GDP growth of the growth rates would continue to be healthy and well ahead of the growth rates of the developed countries. Growth in developed countries is expected to drop to 1.3% this year while emerging market are expected to grow at a lower rate of just over 5%.

The relatively strong growth rates will continue to have a positive effect on stock prices and many fund managers are increasing asset allocations to emerging markets generally and the BRIC economies in particular. They also believe that households in US and Europe will be unable to spend much because of what they need to service debt. On the other hand, the growth in emerging markets would place far more spending power in the hands of the consumer to fuel growth. These growth prospects are also expected to offset the higher risk of investing in BRIC countries.

BRIC countries will never be easy to invest in because of the complicated local conditions and the time and effort required analyzing investments. If you are attracted by the prospective returns but do not have the time or expertise to identify direct investments, you should let the experts on the job for you. You should use BRIC ETF investments to achieve your exposure and portfolio diversification. Depending on your views on the various countries in BRIC, you can choose ETFs that allocate your investment in accordance with your preferences.

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