The focus is back on how to invest in Brazilian Financials Sector? Partly,owing to a revised GDP forecast for the nation and a fact that Brazil and its economic growth relies heavily on its thriving middle class population. The government knows that socio financial upgrades are impossible in absence of a sound Brazilian Banking and Finance structure.
Foreign Investors, those who are willing to bet long on the asset, may consider Brazil Financials ETF that delivers as per the yields and prices of the most liquid and large cap Brazil Financials equity. Funds such as Global X Brazil Financials are market traded and charge lesser fees from its investors in contrast to the mutual funds of the same investment objective.
Brazil can very well boast of a stable economy and a strong domestic market. Among these are placed more attractive points that make this nation a favourable foreign investment junction. The country is rich in natural resources and culture. In Politics it has achieved Democratic constancy and has participated as a front-runner in the political & economic spheres of Latin America as a whole.
Net Export figures are growing and the country's GDP growth for the year 2012 was around 3.6 %. In the current year too, most analysis is in favour of GDP posting a healthy growth rate amidst low levels of - inflation and unemployment.
Brasília, as the natives refer, is already a hot tourist spot and this rush will be heightened with the high end events to be held in the country. The FIFA world cup to be held in the year 2014 and the Olympics in the year 2016 will be held in the capital city Rio de Janeiro. The government has allocated a fund reaching in millions of dollars to improve infrastructure all over the country before the commencement of these events that are being associated with increase in international investment too.
Brazil centric vehicles from I shares ETF or a pure play like Global x Brazil ETF [BRAF]may be used to harness this cash stimuli as well, although a longer horizon is most recommended.
In the year 2008 the Standard and Poor's rating agency deemed Brazil fit for foreign investment and presented it with "investment grade status". This fact was reiterated by other globally renowned rating agencies such as Moody's and Fitch. The up gradation in the nation's economic policies and financial system helped it achieve this status and it offers international investors / traders with the desired official safety cushion and legislation.
Another area of foreign and local interest is the Brazilian property market. The low interest rate environment has created affordable homes for the native population resulting in price rise in real estate sector, this trend is continuing since last seven years or so.
The stocks of small and medium sized firms are expected to do well as the rising middle class consumers satiate their purchases through these companies.
The Financial sector has evolved into well organised sector and has also been able to deal with the loaning and claiming security on debt.While investing in Brazil's financial sector, individuals can lookout for names like Itau Unibanco, Bank Bradesco and Banco Satander Brasil SA, but simultaneously understand that Brazil financials ETF, like all other emerging markets products must be treated with a long outlook.
Invest Brazil financials sector [BRAF] delivers as per the returns of the name sake Solactive Index post a fee of 0.77% on annual transactions. BRAF Global X has a high tilt towards the financials (62.56 %), second place is occupied by the real estate (24.56%), and then the consumer cyclical stocks include industries providing durables and other services (7.92 %) and last slot is taken by the technology sector (4.95 %).