Per Investopedia, “India is the fastest growing trillion-dollar economy in the world and the sixth largest with a nominal GDP of $2.61 trillion. India is poised to become the fifth largest economy overtaking the United Kingdom by 2019 as per the IMF projection.”
India-specific ETFs to consider include the iShares MSCI India Small-Cap ETF (NYSEArca: SMIN), VanEck Vectors India Small-Cap Index ETF (NYSEArca: SCIF) and the iShares MSCI India ETF (CBOE: INDA).
Brazil: A Magnet for Foreign Investment
The Brazilian economy has been slogging its way to a recovery after it experienced its worst recession to date as unemployment levels remain high with double-digit figures and the country is drowning in public debt–equal to 74% of GDP.
While the annual GDP growth has posted positive gains as of late, it’s still not at a level where economists are optimistic about the future growth prospects. While the country is in the midst of a presidential election, the ideal situation to address Brazil’s current financial woes is to elect a leader who is market-friendly to help stymie the issues by effecting policies that favor economic expansion and growth.
In the meantime, companies like Shell and Chevron are still funneling capital into Brazil real estate to tap into the country’s oil supply. The Brazilian government is reportedly taking in an estimated $1.71 billion from the real estate deals, which will provide the country with the capital injection it needs ahead of an important election.
Yet, there are some market analysts who feel that despite the victor in the election, investment in Brazil will continue.
“For many years, Brazil has retained a high level of direct foreign investment,” said Roberto Jaguaribe, President of Apex-Brasil. “Over the last few years, it has improved dramatically in bringing in new investments in sectors, such as the oil sector where we have now all the major players in Brazil so I think this is going to continue independently of who wins the election.”
Brazil focused-ETFs ton consider include the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ), the broader-based Direxion Daily Latin America Bull 3X ETF (NYSEArca: LBJ) or for investors or short-term traders who aren’t risk averse, the Direxion Daily MSCI Brazil Bull 3X ETF (NYSEArca: BRZU).
Opportunities in EM Debt
In addition to country-specific ETFs, there are also opportunities abound for investors seeking value and one of those areas is within emerging markets debt through the VanEck Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC). With respect to value compared to price, many EM ETFs from abroad could present a profitable opportunity for investors, such as those in emerging markets debt in EMLC.
“We’re seeing some pretty significant inflows back into EM local,” William Sokol, ETF Product Manager at VanEck, told ETF Trends. “It’s obviously been a tough year, but for a variety of reasons, we have investors coming back into this space.”
“Local yield are now 7.2%, which is significantly higher than where we started the year,” added Sokol. “I think you look at that in the context of fundamentals and there’s clearly some countries that are in the headlines and some that continue to be like Turkey that are suffering from certain political or economic issues, but overall, fundamentals still are relatively healthy especially compared to past periods where there have been sell-offs in EM.”
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