Earlier this year, Mexican President Enrique Peña Nieto signed legislation ending the 75-year run of control over the country’s energy industry by state-owned oil company Pemex. [ETF’s for Mexico’s New Look Oil Industry]
However, IXC and IPW, two ETFs with large allocations to Royal Dutch Shell (NYSE: RDS-A), a company that has been overt in its desires to become more active in Brazil, are down an average of 7% this year. Still, it is expected that increased foreign investment in Mexico’s oil industry could eventually elevate the country to the fourth spot among the world’s oil-producing nations.
Investors with long-term horizons can consider waiting for a legitimate change to Brazil’s oil policies with an ETF like IPW because international oil stocks trade sport higher dividend yields and lower valuations than their U.S. counterparts. For example, IPW yields almost 3.6% with a P/E of 12 while the U.S.-focused Energy Select Sector SPDR (NYSEArca: XLE) yields 2.1% with a P/E of nearly 14. [Global Energy ETFs Look Like Bargains]
SPDR S&P International Energy Sector ETF
