Best BRICS ETFs: Strategic Investment Options for Emerging Market Exposure

The expansion of the BRICS economic bloc has caught investor attention worldwide. Following a recent summit, the five core BRICS nations—Brazil, Russia, India, China, and South Africa—extended invitations to six additional emerging market countries: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. This expanded group, known as BRICS-11, now commands approximately 36% of global GDP and represents 47% of the world’s population, making it a significant economic force. For investors seeking exposure to this growing alliance, the best BRICS ETF options provide diversified pathways into these high-potential markets. Here’s what you need to know about investing in BRICS through exchange-traded funds.

Understanding the Best Criteria for BRICS ETF Selection

Before examining specific funds, it’s important to understand what qualifies as a strong investment vehicle for BRICS exposure. Institutional-grade ETFs typically maintain minimum net assets of $250 million to ensure liquidity. The portfolio companies should have a median market capitalization of at least $1 billion, providing stability and market depth. Additionally, seeking funds with dividend yields of 1.5% or higher helps maximize income alongside potential appreciation. These benchmarks ensure you’re investing in professionally managed, liquid funds with substantial underlying assets.

The expansion of BRICS represents more than just a political alliance—it reflects shifting global economic power toward emerging markets. These nations collectively control vast natural resources, manufacturing capacity, and consumer markets. ETFs tracking these regions offer institutional-level access to companies that benefit from this economic rebalancing.

EMXC: Broad Emerging Market Exposure Across Multiple BRICS Nations

The iShares MSCI Emerging Markets Ex China ETF (ticker: EMXC) stands out as the largest fund in this category, with net assets of approximately $5.2 billion as of late 2023. This passive index fund launched in July 2017 and tracks the MSCI Emerging Markets Ex China Index, providing exposure to 23 of 24 emerging market countries while intentionally excluding mainland China.

Geographic concentration reveals a strategic positioning: India represents 21.50% of holdings, Taiwan comprises 21.04%, and South Korea accounts for 17.95%. This allocation captures multiple BRICS members—India, Brazil, and South Africa—while also gaining exposure to Saudi Arabia and the United Arab Emirates from the expanded BRICS-11. The fund’s sector composition emphasizes technology (26.79%), financials (24.71%), and materials (10.12%), reflecting emerging market strengths.

With 705 total holdings and a top-10 concentration of just 23.58% of assets, EMXC offers substantial diversification. The average portfolio company carries a market cap of approximately $30.2 billion, placing it firmly in the large-cap category. Historical performance illustrates the long-term potential: a $10,000 investment at the fund’s July 2017 inception would have grown to $11,779 by September 2023, despite market volatility. The current 2.3% dividend yield provides steady income while you wait for potential capital appreciation.

XSOE: Emerging Market Growth Without State-Owned Enterprise Exposure

The WisdomTree Emerging Markets State-Owned Enterprises Fund (ticker: XSOE) takes a contrarian approach by deliberately excluding companies with 20% or greater state ownership. This strategy appeals to investors concerned about government intervention, transparency issues, or regulatory risk. The fund tracks the WisdomTree Emerging Markets ex-State-Owned Enterprises Index, launched in August 2014, with the ETF itself beginning operations that December.

XSOE manages $2.2 billion in net assets across 586 holdings, representing companies with a combined market capitalization of $8.18 trillion. The portfolio skews heavily toward large-cap companies, with firms valued at $10 billion or more occupying nearly 69% of assets. Geographic concentration places China at 25.22%, India at 19.31%, and Taiwan at 16.94%. This fund captures substantial BRICS-11 exposure while filtering for private-sector dynamics.

Valuation metrics suggest reasonable entry points: the average holding trades at 18.45x price-to-earnings and 1.35x price-to-sales ratios. Sector weightings emphasize technology (23.16%), consumer discretionary (19.81%), and financials (15.57%), reflecting emerging market consumption patterns. Since inception through June 30, 2023, the fund delivered a 3.4% annualized total return, with current dividend generation reaching 2.6%. This fund appeals to investors prioritizing private-sector exposure and corporate governance transparency within emerging markets.

GXC: Concentrated China Allocation for BRICS’ Largest Economy

The SPDR S&P China ETF (ticker: GXC) represents the smallest of these three options by assets, holding approximately $857.4 million in net assets as of 2023. Established in March 2007, GXC serves investors seeking pure-play China exposure tied to the S&P China BMI Index—a collection of Chinese stocks accessible to foreign investors.

This fund’s concentration strategy comes with both opportunities and risks. China accounts for 99.67% of net assets, making this a single-country bet rather than a diversified emerging market play. However, this singular focus provides unfiltered exposure to China’s economy, which comprises a substantial portion of BRICS economic output. The top 10 holdings represent 34.3% of the entire portfolio, with Tencent Holding (ticker: TCEHY) and Alibaba (ticker: BABA) combining for over half of those top 10 positions, giving investors access to China’s dominant technology champions.

GXC’s sector weighting reflects China’s industrial structure: consumer discretionary (27.25%), communication services (16.93%), and financials (15.22%). The fund employs sampling methodology, holding 945 securities from the index’s broader 2,044-holding universe. Average valuation metrics suggest value relative to growth: price-to-book ratio of 1.24x and P/E ratio of 10.10x. Long-term performance history is compelling—the $10,000 investment at inception had grown to $13,302 by September 2023, though investors experienced significant volatility, with values exceeding $22,000 during the mid-2020 recovery. GXC currently yields 2.93% in dividends.

Selecting Your Best BRICS ETF Strategy

Choosing between these three best BRICS exposure options depends entirely on your investment objectives. EMXC suits investors wanting diversified BRICS-11 access across multiple countries and sectors. XSOE appeals to those prioritizing private-sector companies and governance transparency. GXC is best reserved for investors comfortable with high China concentration seeking direct exposure to the largest BRICS economy.

The BRICS economic bloc’s expansion signals ongoing shifts in global capital flows toward emerging markets. These three ETFs provide institutional-quality vehicles for participating in this structural trend while maintaining reasonable liquidity and diversification standards appropriate for long-term portfolio construction.