Brazil’s exchange traded fund (ETF) got a big boost after Standard & Poor’s rated the country to "investment grade."

The country’s continually growing economy and debt reduction are cited as two reasons for the upgrade, reports Rob Wherry for Smart Money.

Brazil once had a volatile economy, but is now enjoying some newfound stability, says the Associated Press. Experts are predicting that the country’s typical boom and bust economic cycles are a thing of the past.

The upgrade was hard-earned. In the 1980s, the country defaulted on its debt and declared a moratorium on payments. Now it’s booming thanks to exports such as beef, iron ore and soy. Foreign investment is on the rise, companies are making record profits and consumers are taking out loans to purchase cars and homes.

S&P Credit Analyst Lisa Schineller says Brazil appears to be on track for sustained economic growth between 4% and 4.5% this year.

iShares MSCI Brazil (EWZ) and iShares S&P Latin America 40 (ILF) rode the wave, gaining 7.2% and 4.4% yesterday, respectively.

For full disclosure, some of Tom Lydon’s clients own shares of ILF.

Tags: Brazil, Emerging Markets, EWZ, Latin America