Big banks are finding their way to Latin America and Brazil, a strategy to help these financial behemoths reduce dependence on the U.S.
Banking shares and exchange traded funds (ETFs) may harness this growth, particularly as relations with Brazil intensify.
Brazil on Friday released the results of its recent census. The country’s population was nearly 191 million in 2010, up nearly twenty-fold from the first census in 1872.
J.P. Morgan (NYSE: JPM) is showing strong interest in further expansion in Brazil, where the headcount for this banking giant has grown sixfold.
The next frontier for banks in this emerging economy is asset management. Brazil is known to have over $100 billion in government pension funds which will certainly be on the hunt for higher yields once the current tightening cycle comes full circle, report Joe Leahy and Francesco Guerrera for Financial Times. [Are BRIC Economies and ETFs Coming Back?]
Other large banks contending to gain market share in Brazil include Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and Barclays Capital. Many are already ramping up hiring in Brazil to keep up with the high volume of merger and acquisitions, and equity and debt issuance. [Brazilian Real ETF Shoots Higher Despite Curb.]
Some Brazil ETFs include:
- iShares MSCI Brazil Index Fund (NYSEArca: EWZ)
- EGShares Brazil Infrastructure (NYSEArca: BRXX)
- Market Vectors Brazil Small-Cap ETF (NYSEArca: BRF)
- iShares MSCI Brazil Small Cap Index Fund (NYSEArca: EWZS)
Tisha Guerrero contributed to this article.
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.