ETF Trends
ETF Trends

Brazil’s economy and exchange traded fund (ETF) are in good hands with leaders who are working hard to improve the Brazilian quality of life.

Brazil’s president, Luiz Inácio Lula da Silva, is a pragmatic former trade-union leader with an astounding 80% approval rating in his second term, according to Economist.

Optimism High, But… A pollster has reported around three out of four Brazilians expect this year to be better than the last but economic data shows that the economy has yet to feel the full wrath of the global economic recession. Some consultants are also worried about the ability of Brazilian companies to roll over debt as well as possible weakening in the exchange rate, as in the last three months of 2008 the real depreciated 17% against the dollar.

Other Steps Taken. The government will also need to maintain its primary fiscal surplus to retain bondholder confidence and it is said that the tax revenues will slow along with the economy. The main priority will be to implement expansionary “growth acceleration” program of public investment. History has shown that Brazil’s leaders have stuck to economic orthodoxy in rough times.

A Rising Middle Class. President Lula has been cultivating one of the most important emerging economies. In six years, Lula has cut the number of poor in Brazil in half and for the first time the middle class has reached 52% of the total population, reports Tom James for nubricks. He has also made an effort to create more partnerships and be involved with more countries in the global decision-making process in an attempt to break away from the western leadership model.

  • iShares MSCI Brazil Index (EWZ): down 9.1% in the last week, down 10% in the last month

ETF EWZ performance

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.