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Goldman Sachs bails on BRIC funds

Goldman Sachs is known for its emerging-markets acumen. But that doesn’t seem to have helped its effort to peddle mutual funds targeting these stocks.

On Thursday, the company which coined the term “BRIC” as an acronym for “Brazil, Russia, India and China,” filed with the Securities and Exchange Commission detailing plans to shutter mutual funds focused on stocks in two of those countries: Brazil and India. Goldman also plans to close another fund targeting South Korean stocks, according the filing, first highlighted by Morningstar.

Goldman launched all three funds, along with a fourth China fund that doesn’t appear to be affected, last year. (The company didn’t respond to a call for comment Friday afternoon.)

As a group, emerging-markets funds have remained popular, with investors pouring more than $18 billion into such funds this year, according to Morningstar. None of the four Goldman funds have managed to grab more than $10 million, however. Goldman’s more broadly focused emerging-markets funds, including one that targets the BRIC companies as a group, have proven more popular. That fund, the Goldman Sachs BRIC Fund (GBRIX) holds about $400 million, and is up 11% this year.

What gives? One possible explanation is cost. The Goldman Sachs India fund (GNAIX), for instance, charges annual fees of $150 per $10,000 invested for the cheapest share class. By contrast, one popular competitor, the $1.1 billion WisdomTree India Earnings ETF (EPI) levies just $83.

Investors that do own shares of the three Goldman funds will get their money handed back at the end of November, the filing indicates.





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