Political risk in this year's Brazilian presidential election
isn't severe enough to faze investors.
Latin America's economy
will see some healthy growth, led by the quickly-expanding
Brazilian economy. Additionally, Brazil exchange traded fund (
) investors may now track the country's financial sector.
Investors are finding that the current presidential election in
Brazil looks less risky than most elections since the main
contenders favor the market-friendly policies already in place,
which include a free-floating currency, inflation control and
writes Raymond Colitt for Reuters
. Additionally, both candidates agree on the need for an overhaul
of the country's convoluted tax system to encourage foreign
Finance Minister Guido Mantega announced that they will have a
budget surplus target of 3.3% of GDP for the year.
The International Monetary Fund (
) recently stated that Latin America's economy could expand a
higher-than-expected 5% for the year,
report Luciana Lopez, Guillermo Parra-Bernal and
James Matthews for Reuters
. Brazilian economists are even more bullish, predicting that
Brazil's economy will grow 7.2% this year. [
Brazil ETFs: Growing, With Room for More.
Global X Brazil Financials ETF (NYSEArca: notes Ron for
Benzinga. The underlying index, Solactive Index from Structured
Solutions AG, weights each component proportionally to free-float
market capitalization. Individual holdings are capped at 10% in the
highest tier and the next tier caps stocks at 4.75%. BRAF has an
expense ratio of 0.77%.
Brazil's financial sector happens to be robust and benefits from
years of restructuring. Financial investments in Brazil are
estimated to expand by 22% annually through 2020. Bruno del Ama,
Global X Funds
, says that "Brazil is establishing itself as the financial center
of the region, thanks to strong macroeconomic trends over the past
half decade of decreasing fiscal debt and unemployment,
and industrial production." [
10 Steps to an International ETF Portfolio.
For more information on Latin America, visit our
Latin America category
You can easily get exposure to the Brazilian economy by using the
is the top-performing Brazil ETF in the last six months. Others
iShares MSCI Brazil ETF (NYSEArca: EWZ)
Global X Brazil Mid-Cap ETF (NYSEArca: BRAZ)
EGS INDXX Brazil Infrastructure ETF (NYSEArca:
iShares S&P Latin America Index (NYSEArca:
Brazil is 61.9%
SPDR S&P Emerging Latin America (NYSEArca:
Brazil is 64.3%
Max Chen contributed to this article.