Brazil & Chile Present Investor Opportunity – Part 1
As developed global markets struggle to extract themselves from the ‘great recession’, investor attention is often directed to other parts of the global economy in an effort to find other opportunities. A good amount of that focus has landed squarely on the shoulders of Brazil, and, to a lesser extent, Chile, with good reason. There is much to like about both these economies. In fact each puts some developed nations to shame when it comes to their robust fiscal, economic regulations and well managed growth over the last few years. In this multi-part series we will take a look at both separately to see what makes them an appealing investment opportunity for those that are willing to take on some risk.
Brazil has the largest economy in South America and ranks as the world’s fifth most populous country and tenth largest economy. It is uniquely situated in that it shares borders with every country in South America with the exception of Chile and Ecuador. The country has rebounded strongly since the economic problems of 2007, driven by domestic demand as rising incomes create a growing, increasingly consumer-oriented middle class . Brazil is also seeing greater freedom in its export policy, which has led to strong ties with China. In fact, China surpassed the US in 2009 as the largest trading partner. While many assume that trade must be one of the biggest drivers of the economy, it actually only represents a small part of Brazil’s GDP and these exports are further diversified geographically with a low dependence on external financing and reserve accumulation. Incredibly, this has led to Brazil’s international reserves being able to cover the country’s sovereign and private external debt obligations. Read more…
The ETF landscape continues to expand. With the recent launch of new products from major players like Charles Schwab to smaller investment firms that specialize in focused industry areas, there is no shortage of choice for the individual investor. While many of these are often a spin on well established domestic/international/bond indexes there is occasionally a fund that comes along that stands apart from the rest of the crowd.
