Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Six Ways to Invest in Brazil

Companies / Brazil Jul 01, 2010 - 10:27 AM GMT

By: Ron_Rowland

Companies

Diamond Rated - Best Financial Markets Analysis ArticleAnyone familiar with international investing knows about Brazil. It’s hard to ignore the fifth largest country in the world by geography and population, the South American commodities powerhouse, and the largest economy in Latin America!

Over the past five years, Brazil’s largest ETF (EWZ) has posted a better than 200 percent cumulative return, while the S&P 500 is just shy of breaking even. Brazil puts the ‘B’ in the BRIC emerging market economies, and there’s a good reason why …


As the global economy falters, emerging markets like Brazil have been enjoying a steady rise in capital inflows and new opportunities. Global infrastructure has driven down the cost of doing business in South America compared to New York City. Although the ride will not always be smooth, Brazil still looks much more attractive compared to any broad-based U.S. investment.

Brazil: The Crown Jewel of The Southern Hemisphere

Brazil is the economic jewel of the Southern Hemisphere. With a mixture of agricultural, mining, manufacturing, and service sectors, Brazil is one of the more diversified emerging markets.

Brazil dominates Latin America with its rich natural resources. It accounts for most of the world’s soybean trade and nearly 80 percent of global orange juice production. Brazil is also one of the few Western hemisphere countries that is energy independent — thanks to ethanol, abundant oil reserves, and hydroelectric power.

But Brazil isn’t satisfied with its inherited resources. Instead, the Brazilian economy is improving nearly every year …

U.S.-backed General Motors (GM) just opened up a $100 million facility in São Caetano do Sul. It’s one of five global product development sites the car maker runs. GM sees the growth potential of the Brazilian auto market and the cheaper skilled labor force Brazil offers.

The famous Christ the Redeemer statue has been overlooking this Brazilian harbor for nearly 80 years and is now overlooking a bustling economy.
The famous Christ the Redeemer statue has been overlooking this Brazilian harbor for nearly 80 years and is now overlooking a bustling economy.

But GM isn’t alone …

Fiat, Volkswagen, and Ford are investing in Brazilian engineering and design capacity. That’s because Brazil is expanding its infrastructure. With the expansion, forests are being cleared, roads are being built, and cars are being sold to an employable population.

And with each new mile of road being laid, another car is driven by a happy employee on their way to work in the new Brazil. So it’s no surprise that as the U.S. auto market shrank in 2009, vehicle sales in Brazil grew 11 percent.

There are six ways to gain access into Brazil’s burgeoning economy using easy-to-buy ETFs:

Play #1— Ride the Large-Caps In Brazil (EWZ)

Large-cap stocks represent the largest companies by market capitalization — and Brazil has some great large-cap stocks. The cream of the crop can be found in iShares MSCI Brazil ETF (EWZ).

In two weeks, EWZ will celebrate its tenth anniversary as Brazil’s first ETF. Introduced on July 14, 2000, it has gathered more assets than any other non-U.S. single-country ETF. It currently has more than $9 billion under management.

iShares Brazil holds notable large-cap banks, such as Banco Bradesco Sa Brad and Itau Unibanco, and steel manufacturing giant, Gerdau SA. In addition, EWZ invests in Brazilian energy behemoths OGX Petroleo and Petroleo Brasileiro.

These companies give you a wide swath of the Brazilian economy and keep you away from smaller, sometimes more volatile companies.

Play #2— Hitch Your Portfolio to Brazilian Mid-Caps (BRAZ)

The Global X Brazil Mid Cap ETF (BRAZ) just started trading last week. It’s the first ETF to target the mid-cap companies of Brazil and offers access to the country’s internal growth.

Bruno del Ama, CEO of Global X Funds says …

“Such companies are currently sparsely represented in existing exchange traded fund options, yet are poised to benefit the most from the country’s solid macro fundamentals.”

The reason you might pick mid-caps over the large-caps is the internal play on Brazilian growth. Whereas large-caps tend to have more ties to the global economy, mid-caps are more focused on internal consumption. And BRAZ is a great way to buy Brazil, with less exposure to the global economy.

To tap into the Brazil's internal consumer growth, consider BRAZ or BRF.
To tap into the Brazil’s internal consumer growth, consider BRAZ or BRF.

Play #3— Hook onto Small-Caps In Brazil (BRF)

Brazilian small-caps have exploded over the past couple of years. While the rest of the global market has endured everything from panic selling, flash crashes, and central bank-inspired bubbles, Brazil’s smaller companies have enjoyed a relatively steady, substantial climb up the chart.

The easiest way to tap into Brazil’s small-cap growth is with Market Vectors Brazil Small-Cap ETF (BRF). Like BRAZ, BRF is more of a play on the internal growth in Brazil.

More than 30 percent of BRF’s holdings are in the consumer sector and less than 1 percent is in energy. Not only is BRF unlike EWZ from a market cap perspective, but the sector composition is also vastly different.

Play #4— Buy Brazilian Infrastructure (BRXX)

Brazil is investing heavily in the infrastructure needed to support its internal growth.
Brazil is investing heavily in the infrastructure needed to support its internal growth.

If anything, Brazil is known for its voracious appetite for internal growth, almost to the exclusion of anything else. While the environment sometimes plays second fiddle to economic concerns, you should still consider the purest way to buy into that internal development …

Launched in February, EGS INDXX Brazil Infrastructure ETF (BRXX) tracks 30 stocks involved in the development and maintenance of Brazil’s physical infrastructure.

Play #5— Go Super-Long Brazil (UBR)

Do you like everything you see about Brazil but want to improve your return with every uptick of Brazil’s market? Then ProShares Ultra MSCI Brazil (UBR) is the ETF for you.

UBR “seeks daily investment results, before fees and expenses, that correspond to 200 percent of the daily performance of the MSCI Brazil Index.” So to go super-long Brazil, consider UBR.

Play #6— Brazilian Defensive Play (BZQ)

As I mentioned earlier, the upward path for Brazil will not always be a smooth one. In fact, since it is still classified as an emerging market, I expect its markets will undergo numerous bear markets while still maintaining long-term growth.

And when those inevitable setbacks come along, you can exploit the opportunity with ProShares UltraShort MSCI Brazil (BZQ).

BZQ is a 200 percent inverse ETF, which means when the Brazil index goes down 1 percent, this fund should go up 2 percent. It’s a leveraged fund so it’s a great way to play the short-term downside moves, but longer-term performance will be a function of the volatility.

What’s Next for Brazil …

You might be thinking that with six different ETFs to choose from, there would be no need for any more.

Well, just like there are more than six ETFs for the U.S., there will likely be more that invest in Brazil. In fact Global X, the company behind BRAZ, has already made plans to introduce a family of Brazil sector funds.

So there you have it. Six ways to invest in Brazil today and more in the pipeline. Good luck!

Best wishes,

Ron

P.S. Are you on Twitter? If so, please follow me at http://www.twitter.com/ron_rowland for frequent updates, personal insights and observations about the world of ETFs.

Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules