EWZ: Why It Could Be A Good Time To Invest In Brazil
To invest in the Brazilian stock market, I chose the EWZ ETF because it is more liquid, even though it has fewer holdings and is more expensive than its peers. The economic prospects for Brazil are positive, and the country's stock market performance significantly lags behind its GDP growth. The lowering of Fed rates can stimulate the growth of commodity prices and emerging market stocks, including Brazil.
EWZ: Worth The Risk Despite Lula Intervention
The EWZ tracks the performance of the MSCI Brazil index, which is dominated by commodity stocks and characterised by a high dividend yield and cheap valuations. Sentiment towards Brazilian stocks has been undermined by the government's decision to replace the CEO of oil giant Petrobras, raising fears of further government intervention into the corporate sector. The ETF is extremely undervalued relative to its own history and EM peers, and its high FCF and dividend yield suggest it should outperform even if the discount remains intact.
