Are you interested in investing in emerging markets? Well, there are five good reasons why you should consider Brazil, along with five exchange traded funds (ETFs) to play the Brazilian market.

  • A growing consumer market and governmental aid have increased merger and acquisition activity in Brazil, reports Elzio Barreto for Reuters. Agribusiness, finance and consumer retail sectors are seeing more takeovers, corporate restructurings and ventures. The largest deal so far this year is the $21 billion-a-year tie-up between Cosan, producer of sugar and ethanol, and Royal Dutch Shell Plc.
  • Brazil’s Central Bank stated that the country’s economic rebound is pressuring consumer prices, which many consider a good signal that interest rates might increase no later than April, writes Andre Soliani Costa for BusinessWeek. Some traders are betting that the Central Bank will raise rates by 0.25% to 9% as soon as next month. The Central Bank has projected a 5.8% economic expansion for the year. [Coping with Risk in Latin America.]
  • A recent Getúlio Vargas Foundation survey found that there was an upward shift in Brazil’s income levels, according to Isabela Vieira for Brazzil Mag. The Brazilian income tier is looking less like a pyramid and more like a diamond-shape, with a slight contraction at the bottom and a distending middle class.
  • Brazilian bank Itau Unibanco Holding SA (NYSE: ITUB), Brazil’s largest private-sector bank, is focusing on domestic expansion, opening 150 agencies across the country this year, reports Rogerio Jelmayer for The Wall Street Journal. Furthermore, the bank expects to expand its credit portfolio by around 20%. Banco Bradesco S/A (NYSE: BBD), Brazil’s second-largest private bank, wants to invest $2.27 billion in its operations this year. Banco do Brazil SA, the country’s largest bank in terms of assets, has also engaged in acquisitions to help maintain its presence as a market leader.
  • Better-than-expected soybean production may a decent boost to Brazil’s thriving economy in 2010, comments Nathaniel Parish Flannery for Emerginvest. The Agriculture Ministry expects that Brazil, the world’s second largest soybean producer, could benefit from greater rain fall this year. Brazil’s Finance Minister, Guido Mantega, forecasts an economic expansion of 5.2% in 2010. [Brazil Shows Its Might.]

For more information on Brazil, visit our Brazil category.

  • iShares MSCI Brazil (NYSEArca: EWZ)

  • Market Vectors Brazil Small Cap (NYSEArca: BRF)

  • iShares MSCI BRIC (NYSEArca: BKF): Brazil is 27.4%

  • Claymore/BNY BRIC (EEB): Brazil is 52.8%

  • SPDR S&P BRIC 40 (NYSEArca: BIK): Brazil 23.9%


Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.