Mobius is focusing on Brazilian financial stocks like Itau Unibanco SA, Banco Bradesco SA and exchange operator BM&FBovespa SA. Other positions include brewer Ambev SA and car rental company Localiza Rent a Car SA.
EWZ also includes large positions in many of Mobius’ picks. For instance, Ambev is 11.8% of EWZ’s portfolio, along with 10.1% Itau Unibanco, 6.9% Banco Bradesco, 2.7% BMF Bovespa and 0.6% Localiza Rent a Car. The Brazil ETF includes a heft 32.9% tilt toward financials.
“We’ve been coming here since the 1980s. Things are not as bad as they were then, and we’ve got to put that into perspective,” Mobius said. “It’s not going to happen overnight, not all the things we’d like to see will happen, but I think it will be enough to see a recovery in the market in the next few years.”
iShares MSCI Brazil Capped ETF
Max Chen contributed to this article.