What Does CIVETS Mean?

The term CIVETS is an acronym for six countries: Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa. The economies of these emerging markets are associated with rapid development and growth. They were identified in the late 2000s as the next emerging market stars. CIVETS was coined in 2009 at the Economist Intelligence Unit (EIU) in London. It plays off another acronym, BRICS (Brazil, Russia, India, China, and South Africa), which was created by a Goldman Sachs economist in 2001 to describe these emerging market countries thought to be the next rising stars.

Understanding C𓂃IVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa)

Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa were believed to be the next generation of 澳洲幸运5官方开奖结果体彩网:tiger economies because they shared fast-growing, relatively diverse economies as well as large populations that were younger than age 30. Hence, these countries showed great potential for high levels of growth in domestic consumption.

According to the 澳洲幸运5官方开奖结果体彩网:World Bank, these countries experienced significant growth between 2000 and 2019. The global COVID-19 pandemic caused a slight economic slump. But these economies have shown signs of recovery. The World Bank reported the 澳洲幸运5官方开奖结果体彩网:gross domestic product (GDP) for CIVETS countries in 2022 as:

• Colombia: $343.94 billion
• Indonesia: $1.32 trillion
• Vietnam: $408.8 billion
• Egypt: $476.75 billion
• Turkey: $905.99 billion
• South Africa: $405.87 billion

These countries are also characterized by several common factors, including relative political stability (especially when compared to previous generations), a focus on higher education, reasonably sophisticated financial systems, and growing economic trends overall.

Furthermore, the economies of the CIVETS countries were generally dynamic without any dependence on external demand or 澳洲幸运5官方开奖结果体彩网:commodity exports that characterize some economically developing nations. They also had a relatively low level of public debt, as well as corpor෴ate and household debt.

Special Considerations

The wisdom of so-called acronym investing (putting money into small groups of markets that often have little in common beyond a broad economic concept) is debatable among investment professionals. While it is true that many of the CIVETS countries (and others lumped under separate acronyms) enjoyed periods of turbo-charged economic growth, it also is trꦕue that investment gains are 🔥not guaranteed.

More than a decade after the creation of CIVETS, many fund managers do want exposure to many of the countries in these varওious groups, but they want expos🌄ure to them individually. Some others are suspicious of acronyms that they might view as marketing hype.

CIVETS countries are as worthy an investment tool as any other. However, relying exclusively on 澳洲幸运5官方开奖结果体彩网:demographics to 🐟make investment decisions is always a risky choice because demographics change—that is their nature.

Investing in CIVETS

Exposure to CIVETS countries became possible for retail investors through the use of exchange-traded funds (ETFs). For example, in 2011, Standard & Poor’s launched the S&P CIVETS 60 Index, which targeted second-generation emerging markets investments. The index included 60 components, consisting of 10 liquid stocks from each of the six targeted countries, trading on their respective domestic exchanges.

HSBC Global Asset Management introduced a fund with a similar concept in 2011: the HSBC Global Investment Funds CIVETS fund, which targeted long-term returns by investing in a 澳洲幸运5官方开奖结果体彩网:diversified portfolio of equities from the CIVETS countries as well as others with similar demographics. HSBC closed the fund two years later due to its limited growth and insufficient 澳洲幸运5官方开奖结果体彩网:assets under management (AUM).

The Bottom Line

Emerging markets are countries whose economies are rapidly developing and are m❀oving toward industrialization. These markets, like the CIVETS countries, may be attractive to investors because of their growth prospects and the potential for big returns. But keep in mind that there are also rꦫisks associated with investing in these areas, including political issues and fluctuations in currency. You also run the risk of loss for simply investing in markets that may not necessarily have anything in common other than a broad economic concept.