The BRICS Composite Index bundles the largest and most liquid stocks from Brazil, Russia, India, China, and South Africa into one free-float-weighted performance gauge—thereby offering investors a single snapshot of the five major emerging-market economies. Consequently, it simplifies allocation decisions while highlighting cross-country trends that might otherwise go unnoticed.
1. Composition Rules
| Criterion | Requirement | Transition Note |
|---|---|---|
| Country Allocation | Capped at 35 % per country; weights reset quarterly | First and foremost, caps curb over-concentration. |
| Constituent Count | 50 large- and mid-cap stocks (10 per market) | Meanwhile, breadth stays manageable. |
| Float Adjustment | Only freely tradable shares count toward weight | Thus, state-controlled stakes are diluted. |
| Sector Diversification | Minimum three GICS sectors per country | Additionally, sector balance tempers idiosyncratic risk. |
| Currency | Prices converted to U.S. dollars for total-return series | Finally, a single currency eases global comparison. |
Accordingly, the BRICS Composite Index remains both diversified and rules-driven.
2. April 2025 Snapshot
- Index Level: 4 752
- Market-Cap Coverage: ≈ US $1.6 trillion
- Country Weights: China 35 %, India 29 %, Brazil 14 %, South Africa 12 %, Russia 10 %*
- Sector Split: Financials 25 %, Information Tech 18 %, Energy 14 %, Materials 13 %, Consumer 12 %, Others 18 %
*Russia weight capped using depository receipts and secondary listings because of sanctions. Thus, liquidity remains adequate.
3. Recent Performance
| Period | Total Return (USD) | Key Driver | Transition Note |
|---|---|---|---|
| 2022 | –18.9 % | Rate hikes, China lockdowns | Initially, macro headwinds dominated. |
| 2023 | +11.4 % | India tech rally, commodity rebound | Subsequently, growth resumed. |
| 2024 | +9.7 % | AI hardware demand lifts Chinese chipmakers | Moreover, tech momentum spread. |
| YTD 2025 | +4.6 % | Soft-landing optimism, weaker USD | So far, currency tailwinds help. |
Three-year volatility sits at 21 %, roughly 1.3× MSCI ACWI; therefore, risk budgeting is essential.
4. Why Investors Track It
- Unified EM Proxy. One ticker expresses BRICS equity beta, thereby eliminating the need to juggle local accounts.
- Diversification. Economies span commodities, manufacturing, and services, hence lowering single-country shock.
- Strategic Allocation. Pensions and sovereign funds benchmark dedicated EM sleeves to the BRICS Composite Index; consequently, mandates stay aligned with growth themes.
- ETF Underpinning. Several London- and HK-listed ETFs replicate the basket, thus providing daily liquidity.
5. Strengths & Caveats
| Strengths | Limitations |
|---|---|
| Quarterly caps prevent China dominance. | However, political risk and currency swings elevate volatility. |
| Float-adjustment filters state-owned stakes. | Meanwhile, Russia access relies on ADRs; liquidity can gap. |
| USD total-return series simplifies comparison. | Conversely, mid/small caps that drive local alpha are excluded. |
6. Outlook
- Green-Energy Upside. Brazil hydrogen, India solar, and China EV supply chains could, in turn, boost Materials and Industrials weight.
- Geopolitical Shifts. Expanded BRICS membership (Saudi Arabia, Egypt) may spur BRICS Composite Index reconstitution discussions for 2026.
- FX Impact. A dollar-cycle turn would add tailwind—indeed, each 1 % DXY drop historically adds ~0.7 % to USD index return.
Key Takeaways
The BRICS Composite Index rolls five fast-growing markets into a single, float-weighted benchmark. As of April 2025, China and India share 64 % of weight, while financials and tech lead the sector mix. Ultimately, investors use the BRICS Composite Index for strategic emerging-market exposure yet must manage elevated volatility and headline risk.
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