If you were wondering whether the World Cup actually delivered any meaningful benefit to the host country and exchange traded funds (ETFs) that track it, the proof that it does is here.
The last World Cup helped South Africa’s economy generate $527 million and brought in more than 309,000 visitors, reports Christy Wyatt for Conference & Incentive Travel. [Africa ETFs: A Continent With Potential.]
Minister Marthinus van Schalkwyk stated that “the World Cup was never about the hosting of a tournament, but rather about building a legacy for our country and our continent – a legacy in terms of infrastructure development, economic growth, skills development, job creation, nation building and brand awareness.”
In the last two years, iShares MSCI South Africa Index (NYSEArca: EZA) has gained 93.2%; a good chunk of that likely came from increased economic activity as a result of the World Cup.
This could mean good things for ETFs that hold Qatar and Russia, such as SPDR S&P Russia (NYSEArca: RBL), WisdomTree Middle East Dividend ETF (NYSEArca: GULF), of which Qatar is 24.2% and Van Eck Market Vectors Gulf States ETF (NYSEArca: MES) of which Qatar is 24.1%.
Russia will host the 2018 World Cup. Russian Prime Minister Vladimir Putin stated that the country will overhaul its infrastructure to meet the deadline. The government will spend around $3.8 billion on stadiums and expand airports and roads, but Chris Weafer, chief strategist at UralSib Financial Corp, believes that total spending may reach as high as $500 billion. [6 ETFs to Play the World Cup Picks.]
Qatar will host the 2022 World Cup. Part of the country’s success is attributed to the years and billions of dollars in investments dedicated to developing sports – especially football (that’s soccer, of course). Qatar’s economy is expected to expand 15.5% this year and potentially surge 21% in 2011.
Is it a given that the World Cup will boost these ETFs? Not necessarily, but it will be an interesting thing to watch as this story plays out. Market Vectors Brazil Small-Cap (NYSEArca: BRF) looks to have benefited from the attention as the 2014 host; it’s up 20.3% in the last year.
Max Chen contributed to this article.