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Vamos Argentina! Too Late to Bet on World Cup Champs?
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Exchange-traded funds (ETFs) are investment instruments that empower investors to effortlessly invest in a diversified portfolio of stocks, bonds, or other assets. A significant benefit that ETFs provide is the ability to gain exposure to a wide range of assets, such as global markets, in one investment.
In the past, if an investor wanted to gain exposure to foreign markets, they would have to open a foreign brokerage account, go through the tedious process of converting their currency to a foreign currency, and buy a basket of stocks or the country’s main index. Not only is the process expensive, but it also takes a lot of time. With global ETFs, investors unlock benefits such as:
1. Diversification: Investors can gain exposure to uncorrelated markets by investing in a basket of foreign stocks via an ETF.
2. Liquidity: Many stocks in global equity markets are illiquid and risky. Through ETFs investors gain liquidity and peace of mind.
3. Flexibility:Investors can choose to hold global ETFs for the long-term or use them as a short-term trading vehicle.
4. Low cost:Generally speaking, investing in ETFs is less costly than mutual funds and easier to enter and exit.
With the U.S. market stuck in a downtrend, now is an excellent time to explore global ETFs. Below is one that may outperform handily:
Argentina (ARGT - Free Report) : Though Argentina is plagued by hyperinflation, it may be too soon to write the Latin American country off. Fresh off an epic World Cup victory, it’s hard not to have some hope. In fact, having that sentiment is not just emotions and false hope, studies back it. A recent study from the University of Surrey shows that the country that wins the World Cup tends to see growth increase by up to a quarter percent on average for the next two quarters following the victory. Another study found that annual GDP increased by 1.6% on average following a victory since 1990.
Image Source: Zacks Investment Research
Relative Strength: Over the past year ARGT, is up 8.69% despite the tumultuous backdrop of the global economy. The S&P 500 Index has returned -16.93% over that same time span. ARGT is also flashing some positive technical signs. Recently, the 50-day moving average crossed above the 200-day moving average to form a bullish “golden cross”.
“The Amazon of South America”. ARGT’s largest holding is Mercado Libre (MELI - Free Report) , the Buenos Aires-based e-commerce leader of South America. MELI accounts for 25% of the ARGT ETF. While Mercado Libre is based out of Argentina, its largest market is Brazil. Recently, Brazil elected a new president who is likely to implement more stimulus in the form of welfare to its citizens. The move is expected to be a catalyst for MELI moving forward and, thus, the ARGT ETF.
Other outperforming global ETFs include Mexico (EWW - Free Report) ,Japan (EWJ - Free Report) ,China (FXI - Free Report) , and Brazil (EWZ - Free Report) . China and Brazil have clear catalysts. Since its presidential election, Brazil has outperformed and may continue to in the short term as the government looks to spend more on welfare programs. China which has been shut down for months is set to reopen its economy. While China has underperformed in 2022, many stocks, such as Pinduoduo Inc (PDD - Free Report) and New Oriental Education (EDU - Free Report) are outperforming in recent months. They may continue to if they simply have a reversion to the mean.
Image Source: Zacks Investment Research
Pictured: After months of underperformance, Chinese stocks are beginning to revert to the mean.
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Vamos Argentina! Too Late to Bet on World Cup Champs?
Exchange-traded funds (ETFs) are investment instruments that empower investors to effortlessly invest in a diversified portfolio of stocks, bonds, or other assets. A significant benefit that ETFs provide is the ability to gain exposure to a wide range of assets, such as global markets, in one investment.
In the past, if an investor wanted to gain exposure to foreign markets, they would have to open a foreign brokerage account, go through the tedious process of converting their currency to a foreign currency, and buy a basket of stocks or the country’s main index. Not only is the process expensive, but it also takes a lot of time. With global ETFs, investors unlock benefits such as:
1. Diversification: Investors can gain exposure to uncorrelated markets by investing in a basket of foreign stocks via an ETF.
2. Liquidity: Many stocks in global equity markets are illiquid and risky. Through ETFs investors gain liquidity and peace of mind.
3. Flexibility:Investors can choose to hold global ETFs for the long-term or use them as a short-term trading vehicle.
4. Low cost:Generally speaking, investing in ETFs is less costly than mutual funds and easier to enter and exit.
With the U.S. market stuck in a downtrend, now is an excellent time to explore global ETFs. Below is one that may outperform handily:
Argentina (ARGT - Free Report) : Though Argentina is plagued by hyperinflation, it may be too soon to write the Latin American country off. Fresh off an epic World Cup victory, it’s hard not to have some hope. In fact, having that sentiment is not just emotions and false hope, studies back it. A recent study from the University of Surrey shows that the country that wins the World Cup tends to see growth increase by up to a quarter percent on average for the next two quarters following the victory. Another study found that annual GDP increased by 1.6% on average following a victory since 1990.
Image Source: Zacks Investment Research
Relative Strength: Over the past year ARGT, is up 8.69% despite the tumultuous backdrop of the global economy. The S&P 500 Index has returned -16.93% over that same time span. ARGT is also flashing some positive technical signs. Recently, the 50-day moving average crossed above the 200-day moving average to form a bullish “golden cross”.
“The Amazon of South America”. ARGT’s largest holding is Mercado Libre (MELI - Free Report) , the Buenos Aires-based e-commerce leader of South America. MELI accounts for 25% of the ARGT ETF. While Mercado Libre is based out of Argentina, its largest market is Brazil. Recently, Brazil elected a new president who is likely to implement more stimulus in the form of welfare to its citizens. The move is expected to be a catalyst for MELI moving forward and, thus, the ARGT ETF.
Other outperforming global ETFs include Mexico (EWW - Free Report) , Japan (EWJ - Free Report) , China (FXI - Free Report) , and Brazil (EWZ - Free Report) . China and Brazil have clear catalysts. Since its presidential election, Brazil has outperformed and may continue to in the short term as the government looks to spend more on welfare programs. China which has been shut down for months is set to reopen its economy. While China has underperformed in 2022, many stocks, such as Pinduoduo Inc (PDD - Free Report) and New Oriental Education (EDU - Free Report) are outperforming in recent months. They may continue to if they simply have a reversion to the mean.
Image Source: Zacks Investment Research
Pictured: After months of underperformance, Chinese stocks are beginning to revert to the mean.