Some of the world’s largest hedge funds are diving into Argentine stocks, and retail investors can also play the market through a country-specific exchange traded fund.
The Global X FTSE Argentina 20 ETF (NYSEArca: ARGT), which tracks the FTSE Argentina 20 Index comprised of the twenty largest and most liquid companies in the Argentine market, has increased 13.8% year-to-date.
Despite defaulting on its debt for the second time in 13 years, Argentina is attracting hedge funds like DE Shaw, George Soros’s family office, Third Point and Renaissance Technologies, the Financial Times reports.
According to regulatory filings, the hedge funds have acquired holdings in U.S.-listed Argentine shares, including YPF S.A. (NYSE: YPF), Petrobras Argentina, Telecom Argentina and Banco Frances.
The Global X FTSE Argentina ETF includes a heavy 12.6% tilt toward YPF, along with a 4.8% position in Telecom Argentina, 3.3% in Petrobras Argentina and 3.8% in Banco Frances.
Analysts argue that some investors are hopeful that a resolution to the complicated defaults could still be reached.
For instance, Dan Loeb, manager of Third Point, argues that we are seeing a “critical inflection point for the country.” [Latin America ETFs to Play Hedge Funder’s Picks]