London’s Financial Times offers a novel solution to Portugal’s debt crisis: annexation by its former colony, Brazil. Despite Portuguese outrage, the FT has a point. If it absorbed Portugal, Brazil’s GDP and debt would rise by 10%. Portugal, from being the poorest in old Europe, would be part of a country with a future – a stable government, a growing economy, a trade surplus, and hard cash in a solvent bank – all things Portugal sorely lacks. Like its economy Portugal’s stock index, the PSI 20 has been flat all year.
Not Brazil. iShares’ EWZ (one of the largest of all ETFs with $13 bln in assets) holds large caps like Petrobras and miner, Vale. These two firms are 37% of the ETF. EWZ is up 6.5% in one year.
For firms tied to Brazilian’s prosperity, there is the Brazil Small Cap (BRF). Heavier on consumer and industrial sectors, in one year it has earned 30%. BRF is recovering from a stumble (see chart) but it is still not cheap. High inflation may also hurt it. But further out, BRF is a winner.
|52 Week High||$59.77|
|52 Week Low||$35.74|
|Avg Daily Volume||0.35 Million Shrs|
|Avg Daily Volume ($)||$19.34 Million|
|Total Market Cap||$909.90 Million|
|ETF Annual Fee||0.71%|
|ETF Trading Currency||USD|
|ETF FX Exposure||BRL|
|Annual Volatility||Not Available|
|Correlation to S&P 500||77.07%|
|Return to Risk Ratio||Not Available|
|Use of Leverage||No|
|Use of Futures||No|
|6 month Return||7.67%|
|1 Year Return||30.10%|
|2 Year Return||Not Available|
|3 Year Return||Not Available|
|Dividend Yield (TTM)||Not Available|