Investors are attracted to Brazil for robust economic growth and the hope of high returns. One prominent hedge funds is betting on Brazil by using an ETF.
Money manager Ray Dalio, who runs Bridgewater Associates, a $120 billion hedge fund, purchased 2,002,700 shares of iShares MSCI Brazil Index Fund (NYSEArca: EWZ) at an average $56 per share, or about $112.2 billion worth of shares, reports Steven Orlowski for Emerging Money.
“The developed world remains mired in the deleveraging phase of the long-term debt cycle,” Dalio wrote in a quarterly letter. “The European deleveraging has been badly managed and is escalating, bringing Europe closer to either debt implosion or a monetization and currency collapse.”
Dalio’s repositioning into Brazilian equities looks like a vote of confidence, especially as he purchased the shares during a period of falling prices and while some observers think emerging markets are slowing. [Emerging Market ETFs: Higher Growth, Better Demographics]
Brazilian growth has been attributed to credit expansion and rising consumer spending.
On Wednesday, Brazil revealed the first phase of a major economic stimulus package, investing over $60 billion in the country’s infrastructure, BBC News reports.
“The measures unveiled by the Brazilian government this afternoon are good news insofar as they will help tackle some of the supply-side problems that are holding the economy back,” Neil Shearing at Capital Economics, said in the article.
iShares MSCI Brazil Index Fund
For more information on Brazil, visit our Brazil category.
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. 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.