BlackRock iShares has expanded its line of country-specific exchange traded funds to help investors access Argentinian markets.
On Thursday, BlackRock rolled out the iShares MSCI Argentina and Global Exposure ETF (BATS: AGT). AGT has a 0.59% expense ratio.
“AGT is an exciting addition to iShares’ country ETF range, which is the broadest in the industry,” Martin Small, Head of U.S. iShares at BlackRock, said in a note. “With the inclusion of Argentina, investors seeking to build exposure in Latin America now have a key addition to their toolkit. iShares MSCI Argentina and Global Exposure ETF is an important extension of our unparalleled toolkit of 65 country funds.”
AGT Tries to reflect the performance of the MSCI All Argentina 25-50 Index, which is comprised of broad Argentina equities that are classified in Argentina according to MSCI Global Investable Market Index Methodology, along with those not included in the methodology but are either headquartered or listed in Argentina with significant links to Argentina’s economy.
This type of broader definition of Argentina-related company exposure may be more appealing to investors as the indexing methodology allows for more diversified exposure.
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.
For more information on new fund products, visit our new ETFs category.