A New Way for ETF Investors to Access Opportunities in Argentina

Investors have looked to the Argentinian developing market for its growth and diversification potential. Additionally, Argentina’s economy has been driven by recent market friendly reforms for foreign investors, pro-markets leadership and floating peso.

President Mauricio Macri has taken steps to rebuild the economy and international investor trust, according to an iShares note. Policy makers have implemented market-friendly reforms, such as the the elimination of the capital lock-up period for investments and the monthly repatriation limits on equity markets. Furthermore, Argentina has removed most of its currency controls to allow the peso to trade freely, which has helped the export industry be more competitively priced in global markets.

“Argentina is one of the most interesting stories of all developing economies as the government continues to re-establish economic normalcy and open its local financial system,” Gerardo Rodriguez, Portfolio Manager for BlackRock’s Emerging Markets group, said in a note. “As the second largest economy in South America, Argentina is in the process of regaining its long held status as a potentially attractive investment destination.”

Looking ahead, MSCI is looking into the country and is under review for a potential market reclassification to Emerging Market from its current Frontier status due to the new policies changes out of the government.

AGT will go head-to-head against the Global X MSCI Argentina ETF (NYSEArca: ARGT), which has been trading for over 6 years. ARGT also tracks the same underlying index as AGT, but iShares is trying to compete against the established Argentina ETF through costs as ARGT come with a higher 0.74% management fees.

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