Brazilian banks also trade at a discount at relative to their U.S. peers. For example, the Financial Select Sector SPDR (NYSEArca: XLF) has a P/E ratio of 13 and a price-to-book ratio of 1.24. BRAF has a P/E 11.84 and a price-to-book ratio of 1.15 with a dividend yield that is more than triple that of XLF’s.
A knock on BRAF is volatility. The ETF has a beta of 1.27 against the MSCI Emerging Markets Index. The ETF’s standard deviation of 30% is 385 basis points higher than the standard deviation on EWZ.
Global X Brazil Financials ETF
ETF Trends editorial team contributed to this article.