Argentinian stocks have climbed steadily since a teaser election last week saw weakening support for President Cristina Fernández's FPV party. Analysts viewed the FPV's poor 26% showing as a litmus test for elections in Oct. Half of the seats in the lower house and two-thirds in the upper house will be up in the air. In 2012, an FPV-dominated Congress nationalized the country's largest oil company, YPF, and erased Spanish Repsol's majority stake.
The Global X FTSE Argentina 20 ETF (ARGT -0.7%) is up 3.9% on the week, increasing the ETF's 1-year gain to 25.8%.
According to the WSJ, fund managers are "showing a greater willingness to seek out yield in unusual places," particularly as growth expectations in other emerging markets like Brazil and India dry up. Alta Vista Research notes that revenues of stocks in the Argentina ETF are expected to grow 33.5% this year and 20% in 2014 (the government-reported inflation rate is 10.5%).