Investors looking at growth opportunities, particularly in emerging markets (EM), may want to give the country of Portugal a closer look. Specifically, they may want to give the Global X MSCI Portugal ETF (PGAL) some consideration given its all-inclusive exposure to the country’s equities in the dynamic wrapper of an exchange traded fund (ETF).
The pangs of global inflation that all countries are experiencing at the moment don’t seem to keep the citizens from spending. The third quarter saw consumers willing to open their wallets despite the economic challenges of rising prices.
Per a Euro News article, “Portugal’s economic growth accelerated to 0.4% in the third quarter from the previous quarter’s 0.1% thanks to an unexpected rise in private consumption despite high inflation, although annual expansion slowed in a potential sign of things to come.” This is good news for the economy heading into 2023, with the prospect that maybe central banks will finally pump the brakes on tightening monetary policy.
“These are not bad numbers and show that consumers, despite having been buffeted by inflation, still showed purchasing power and perhaps even made anticipated purchases,” said Filipe Garcia, economist at Informacao de Mercados Financeiros consultants, in the Euro News article.
Portugal derives much of its income from tourism, and according to Garcia, the economic growth included tourism, “which was the best year ever for tourism in Portugal and this positively impacted activity.” As the responses to the effects of the COVID-19 pandemic are changing, some tourists are more apt to visit countries like Portugal, which bodes well for the country moving forward.
Portugal Equities in 1 ETF
As opposed to drawing from a vast universe of Portugal equities, investors can essentially siphon off quality exposure via the convenience of one ETF through PGAL. PGAL seeks to provide investment results that correspond generally to the MSCI All Portugal Plus 25/50 Index, which is designed to represent the performance of the broad Portugal equity universe, while including a minimum number of constituents.
PGAL gives investors:
- Growth potential: Rebounding from the pandemic, Portugal’s GDP is forecasted to grow at rates of 5.8% in 2022 and 2.8% in 2023. This gives investors time ahead of the new year to shore up their portfolios for growth as 2022 winds down.
- Efficient access: Efficient access to a broad basket of Portuguese securities.
- Targeted exposure: The fund targets exposure to a single country.