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  • Keeping Up With The Argentina ETF! 0 comments
    May 24, 2013 4:04 AM

    To play on Argentina, which logically has nothing withstanding growth, Argentina ETFs may deem suitable to foreign investors. The underlying indices for the ETFs are listed on New York and London exchanges and most pure play funds like the Global X Argentina Fund, use a systematic approach that divides the investment risk among 18 -21 top most liquid Argentine equity or their overseas listed derivatives.

    The cost and the risk involved is considerably lower with broader argentine fund when compared with the direct equity route or even in contrast to buying mutual funds. The ETF managers will also publish a daily list of holdings, while their product prices are refreshed every 10 seconds during market hours on their respective exchanges.

    Argentina and her business owners gets a direct pass to an overall bloc market of close to 280 million natives and combined GDP levels crossing (U.S) $ 3.5 trillion.

    The nation is a rich reservoir of natural resources and mineral deposits. It is ranked number three worldwide for the shale oil and shale gas deposits, has high agricultural outputs with a large area of 170 million hectares of arable land under cultivation.

    The country has made great technological advancement in the field of agriculture and it has achieved export orders worth (U.S) $25 billion in the fiscal year 2011. It is also the main exporter of products like honey, wine, cereals, vegetable oil and meat etc. Even the country's overall domestic consumption has gone up significantly since the year 2003.

    Other established industries include automotive, auto parts, textiles, accessories like foot wear and hand bags, consumer durables, chemicals and pharmaceuticals. The manufacturing structure has a strong stance on using renewable resources of energy with developments in hydro power, wind, solar, geothermal and bio fuel.

    Alongside all of this progress the problem of unemployment has come down drastically from 21.5 % in the year 2002 to about 6.9 % in the year 2012. An estimated 5 million fresh jobs have been created in the last 10 - 11 years.

    This country (characterised by an advance & progressive infrastructure and competent human resource) promotes foreign investment and provides lucrative opportunities for business as the macroeconomic dynamics of it are created in a favourable way and so is the support given by its public sector.

    Investment tools like an Argentina ETF can be considered amidst the country's stocks elevating from a crisis mode due to positive feed backs from the United States. In addition the election of a new Pope Francis to lead the Roman Catholic Church is of Argentinean descent and first Latin American to hold this revered office and so is named Cardinal Jorge Mario Bergoglio. This recent news brought back the Country and its stocks (to a certain extent) in the global limelight.

    The fact that its neighbour- Brazil will be hosting the FIFA World cup and summer Olympics can have a direct positive effect on the Argentine Economy too, owing to the already existing co dependence between the industries of both countries. The current performance of Argentine ETFs has in a way bucked the negative trend amid the bankruptcy rumours and has proven to be growth driven.

    Exposure to fifteen or twenty largest stocks in the country will significantly minimise the individual company risk and alongside that investors should look for sector wise diversification to encapsulate the overall growth in these Latin lands. The market traded funds come with no minimums and the annual operating charges are close to 0.50% - 0.79% on annual transactions.

    Global X FTSE Argentina ETF [ARGT] delivers as per the performance of the FTSE Argentina 20 Index. The pure play Argentina fund ARGT covers the Materials and the Consumer Staple Industry quiet aggressively and vest a close to 60% of its assets in them.

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