Countries like Portugal were among the hardest hit during the pandemic, but as tourism starts to return, look for the Global X MSCI Portugal ETF (PGAL) to rebound.
Portugal recently re-opened its border to non-essential travel, paving the way for more tourism. This is giving the country hope as it re-adjusts its economic growth forecast higher.
“Portugal is likely to raise its economic growth forecast for this year to close to 5% as tourists help boost the recovery and Europe’s Covid-19 vaccination campaign advances,” a Bloomberg article said.
“The government sees gross domestic product expanding as much as one percentage point more than the 4% it forecast in April, Portuguese Finance Minister Joao Leao said in a Bloomberg Television interview in Lisbon.
PGAL seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI All Portugal Plus 25/50 Index. The fund will invest at least 80% of its total assets in the securities of the underlying index and in American Depositary Receipts (“ADRs”) and Global Depositary Receipts (GDRs) based on the securities in the underlying index.
The underlying index is designed to represent the performance of the broad Portugal equity universe, while including a minimum number of constituents. The fund’s expense ratio comes in at 0.58%.
PGAL gives investors:
- Efficient Access: Efficient access to a broad basket of Portuguese securities.
- Targeted Exposure: The fund targets exposure to a single country.
Bouncing Back from 2020
Like the rest of the world, 2020 was a year to forget for Portugal. The economy fell 7.6% in 2020, putting a crimp on businesses that rely heavily on tourism for revenue.
On May 17, U.K. tourists were once again allowed to enter Portugal, so long as they hold a negative Covid-19 test in hand. Additionally, Portugal is on Britain’s “green list” of countries, whereby a period of quarantine is not required upon return.
“We rely very heavily on the British tourists, not only in this bar but also in the town in general,” said Sarah Toner, the manager at Harry’s Bar in Carvoeiro, in a Portugal News article. “Our clients are usually 80 percent British during the summer period and without them it has been really tough.”
“We want tourists to know that Portugal is a safe and clean destination to visit, we have the great weather, the beaches and everyone here is complying with all of the rules – now all we need are the tourists back to enjoy it,” Toner said.