Hammad Khan
The bull market in the iShares MSCI Brazil ETF (NYSEARCA:EWZ) remains firmly intact and the recent dip represents another opportunity to get exposure to this undervalued resource play. Despite gaining more than 20% since my last
EWZ: Bull Market Not Over Yet
Summary
- The iShares MSCI Brazil ETF remains a highly attractive and undervalued resource play.
- The ETF is heavily weighted towards materials and energy, with Vale and Petrobras comprising over one quarter of the market and almost one half of earnings and dividends.
- The recent drop in Brazilian real yields relative to the US has removed support for the currency, which poses the main downside risk to the EWZ.
I am a full-time investor and owner of Icon Economics - a macro research company focussed on providing contrarian investment ideas across FX, Equities, and Fixed Income based on Austrian economic theory. Formerly Head of Financial Markets at Fitch Solutions, I have 15 years of experience investing and analysing Asian and Global markets.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of EWZ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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