wow_happens28
10 years ago
It is POS for now,
1. A Liberal incumbent barely one the last Presidential election by a few votes beating the pro business dude
2,, Dayd later, the big state owned oil company Petrobus, had exposes a $20,billion scandal. It was known before the election but the skunk of a Liberal kept it quiet. Most Liberals are crooks, their whole idea of socialism is a scam.
3. The Brazil dollar has fallen sharply, maybe too fast, so I look for a retracement there. The dillar being strong against all currencies has not helped EWZ either. I must crash someday, the debt is unbelievable.
Been stopped out of this pig 3 times in recent years, looking to get in again.
http://finance.yahoo.com/echarts?s=USDBRL=X&t=5d&l=on&z=l&q=l&c=
wow_happens28
11 years ago
Brazil ETFs in Focus on GDP Contraction: Any Hope for 2014? - ETF News And Commentary
http://ih.advfn.com/p.php?pid=nmona&article=60288229&symbol=EWZ
A year to forget for Brazil isnโt over quite yet, as more bad news has hit the huge South American nation. This time, the weakness comes from the latest GDP report from the country, which was quite poor.
In the report, Brazil revealed that its GDP actually contracted for the most recent quarter (compared to Q2), posting a decline of -0.5%. This was lower than the -0.3% slump predicted by a Bloomberg survey of 38 economists, according to the Financial Times.
The key areas of weakness in the country came from a big slump in agricultural output, which tumbled by 3.5% (q/q), while industry and services were a bit better, showing tiny gains for the time period. Troublingly for the nation though, investment also fell, by 2.2%, suggesting that some are abandoning the country as a destination for capital (also see Brazil ETFs Crushed by Downgrade, Currency Woes).
Given this struggling growth, many might think that a rate cut is in order for the nation. However, with a recent hike to 10% and inflation at nearly 6%, this isnโt really an option, suggesting that the central bank and government officials are kind of stuck for the time being, and that more trouble might be ahead for Brazil.
ETF Impact
As you can imagine, this news has led to some poor trading for the many ETFs tracking Brazil. The gold standard in this corner of the ETF world continues to be the iShares MSCI Brazil Index Fund (EWZ) and this product tumbled after the report on GDP was issued.
This also continues the terrible trend for EWZ for pretty much all of 2013, as the product has lost more than 20% in the time frame. Much of these losses came when the taper discussion first came to the forefront in the U.S., but the recent rate hike and growth concerns are threatening to send the fund into another run lower.
However, it is also worth noting that the slide in shares has hit other aspects of the Brazilian ETF market as of late too, suggesting that other types of securities are by no means immune to what has been happening in the country (see all the Latin America Equity ETFs here).
The Market Vectors Brazil Small Cap ETF (BRF), for example, which targets pint-sized firms in the nation, has lost over 31% on the year, while EWZS has also tumbled by more than 30% in the YTD time frame. Sectors have also been big losers in the time period, with the Global X Brazil Financials ETF (BRAF) and the Global X Brazil Consumer ETF (BRAQ) losing more than 20% each as well year-to-date.
Clearly, no segment has been spared and losses have been pretty widespread across the country. And given the slump in GDP and the lack of foreign investmentโa situation which could continue if there is a taper in the U.S. QE programโit is hard to get too excited about Brazil in the short term.
For this reason, our view on Brazil ETFs is still pretty negative for the most part. EWZ currently has a Zacks ETF Rank #5 (Strong Sell), while BRF has a Zacks ETF Rank #4 (Sell), suggesting that these are likely to underperform their emerging market counterparts in the near term (see all the top ranked ETFs here).
Bottom Line
The situation in Brazil has been pretty terrible and there is little hope for gains in the months ahead. However, given the increases in government spending and the huge need for infrastructure for the coming World Cup and Olympics, a look to a Brazil infrastructure ETF might be an interesting idea.
There is one such ETF that has this focus, the EGShares Brazil Infrastructure ETF (BRXX). This overlooked ETF, which is in my personal portfolio, is certainly not the most popular fund out thereโnor is it the cheapest at 85 bps a yearโbut it could be an interesting and concentrated play on one of the few segments of Brazil that could have some promise in 2014 (see the 4 Best New ETFs of 2013).
The fund has fallen like the rest of the Brazil group lately, but with all the spending still coming, and if the Brazilian government needs to do more in order to pick up the slack in the economy, this could be a top sector to focus on.
So if you still want some exposure to Brazil, BRXX might be a slightly better play at this pointโ it also has a Zacks ETF Rank #3 (Hold)โthough it is clearly a tumultuous and risky environment across the board for the nation in the short term.
christinat
14 years ago
This is an interesting article that touches on EWZ - specifically about it in relation to the other BRICs.
"Investing in the BRICs (Brazil, Russia, India, China) has been hot again, particularly with Brazil and China leading the way. ETFs like iShares MSCI Brazil Index ETF (NYSE: EWZ), iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI) and PowerShares India Portfolio (NYSE: PIN) have done extremely well this year, as money continues to move into these countries."
http://www.benzinga.com/trading-ideas/long-ideas/10/11/568448/an-undervalued-bric-etf