“…To many, civets are best known for the unusual, but essential, role they play in producing the world’s most expensive coffee.

But to emerging market aficionados, Civets is the acronym for Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. As such, it aims to identify the next wave of nations likely to follow the much-celebrated Bric quartet of Brazil, Russia, India and China on to the world stage.

However, it is a rival grouping, the Next 11, that appears to be nudging ahead in the race for recognition. Next 11 has the kudos of being coined by Jim O’Neill, chief economist at Goldman Sachs, who came up with Brics in 2001.

The first investment fund based on the Next 11 concept is due to launch before the end of the year, courtesy of Castlestone Management, a London house best known for its agriculture and commodity funds.

BNP Paribas’ Easy ETF arm does offer a Paris-listed Next 11 exchange traded fund but, for liquidity reasons, this only invests in eight of the markets. Castlestone’s actively managed fund will encompass all 11 countries: South Korea, Mexico, Indonesia, Turkey, the Philippines, Egypt, Vietnam, Pakistan, Nigeria, Bangladesh and Iran.

“The Bric concept was a great success. It worked as an academic concept and as an investment. Bric returns have outperformed almost any other equity product since the concept was termed,” says Arrash Zafari, the manager of the new Castlestone fund.

“We think the Next 11 gives investors another shot at the concept. I see the Next 11 as being a collection of mini-Indias.”

Mr Zafari argues that the Next 11 offer opportunities no longer available in the Bric nations. He points to Olympia Group, Egypt’s largest white goods manufacturer, which trades at seven times consensus earnings estimates, compared to a multiple of 14 for Hong Kong’s Haier and 21 times for Whirlpool India.

“If you go back 10 years you could have got the same opportunities in the Brics. Now there are a lot of funds locked into Bric markets. You have an enormous number of brokers looking at China, India. Who looks at Next 11 countries?” he asks.

However, Mr O’Neill freely admits there was “no great science” behind the creation of the Next 11 universe – he simply listed the 11 most populous emerging markets after the Brics. “The whole Next 11 thing was really just a notion to respond to the never-ending questions about why these four [the Bric countries], why not Indonesia, Turkey, Mexico?” he says.

“It was never intended to be anything like the Bric thing. I regarded the Brics as four integral parts of the world economy. I wouldn’t say the same about all the Next 11 countries.”

He says of the Castlestone offering: “Obviously the timing is clever from a marketing perspective,” with all bar Vietnam in positive territory this year, and double-digit gains in Iran, Bangladesh, Indonesia, the Philippines, Turkey and Nigeria.

Mr O’Neill says latecomers have not missed the Brics boat. “We are entering the beginning of a phase; the Bric consumer. China has overtaken the US to become the biggest car market in the world but sales are only a fifth of where I think they are going to go, and eventually Indian car sales will overtake those of China.”

However, Mr O’Neill does agree with another of Mr Zafari’s arguments; that a Next 11 fund could provide beneficial diversification for investors whose exposure to the asset class is currently limited to the Brics or a global emerging markets fund – with many of the latter being benchmarked to the MSCI EM index, which has a 78.8 per cent weighting to the Brics, South Korea, Taiwan and South Africa.

“The average investor has very little diversification. We think this is complementary to their existing investments,” says Mr Zafari.

Mr O’Neill adds: “There is not a lot of correlation between these 11 countries and between them and the developed world. It actually does, from a portfolio perspective, offer some benefits.”

The rival Civets name came from Michael Geoghegan, chief executive of HSBC, who believes the six nations have bright futures.

His bank may now capitalise with a first Civets fund, although it may be tagged “Civets Plus” to offer wider diversification.

“We are always looking at new fund launches,” says Philip Poole, global head of macro and investment strategy at HSBC Global Asset Management. “We are going through a process of thinking about what we launch next year and it’s certainly an option that is being discussed.

“The retail investment space is characterised by interest in two extremes, the Brics and the frontier markets. There is a middle ground which the Civets concept would address.”

For his part, Mr Zafari describes Civets as “Next 11 lite” potentially offering a more scalable product, thanks to the greater liquidity of its markets, but fewer opportunities.

However, some doubt if there is ever any merit in a fund manager artificially restricting themselves to an abstract universe, rather than seeking out opportunities wherever they lie.

Jerome Booth, head of research at Ashmore Investment Management, thus created the acronym Cement – Countries in Emerging Markets Excluded by New Terminology – arguing “if you want to build a wall, you need both Brics and Cement”.

“I have never understood why anybody should just invest in 11 countries or four countries. It has never made any sense to me. People should diversify,” he says.

Mr Booth does concede the Brics concept has been effective in helping retail investors “get their head around” emerging market investing, adding that concepts such as Next 11 could make some sense if they are complementary to this.

But he concludes: “I think the best solution is to have one fund and have a manager that is able to move around and not stick rigidly to the MSCI index.”