Ishares Msci Brazil Index Fund (NYSEMKT:EWZ)
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BUY MSCI Brazil Index (EWZ—yet again)
Posted by intelledgement on Mon, 03 Aug 09
Again, it makes sense to be long Brazil strategically, as we stated back in 2006. We have moved out of our position here twice due to the risk that the odds in favor of a sharp world-wide decline that will take Brazilian equities with it had waxed. But here and now, the risk is in not being long; under these conditions a position here is di rigeur.
The instrument of our investment in Brazil is the iShares MSCI Brazil Index (EWZ - http://us.ishares.com/product_info/fund/overview/EWZ.htm ). This exchange-traded fund is heavily weighted towards commodities (27%), energy (27%) and financials (19%), as befits a fund for a rapidly developing country with a maturing economy. There is also significant representation for utilities (8%), consumer staples (7%), telecom (4%), and consumer discretionary, industrials, and information technologies (2% each). The P/E ratio is running around 13 and the yield is 4%. EWZ is very heavily traded (21 MM shares/day).
Previous EWZ-related posts:
* BUY MCSI Brazil Index (EWZ) (2 Jan 07 - http://intelledgement.wordpress.com/2007/01/02/ewz/ )
* SELL MCSI Brazil Index (EWZ) (10 Sep 08 - http://intelledgement.wordpress.com/2008/09/10/sell-msci-brazil-index-ewz/ )
* BUY MCSI Brazil Index (EWZ—again) (6 May 09 - http://intelledgement.wordpress.com/2009/05/06/buy-msci-brazil-index-ewz%E2%80%94again/ )
* SELL MCSI Brazil Index (EWZ—again) (13 May 09 - http://intelledgement.wordpress.com/2009/05/13/sell-msci-brazil-index-ewz-global-energy-sector-index-fund-ixc/ )
Buy GXG BRF RSX these are long holds with a lot of room to go, My EWZ I bought in April , the long side to this ETF very possible over the old high, please look at the performance of these other ETFs , they have both small cap and large cap, very good solid performance in the next year, take care
GXG is Columbia, BRF is small cap Brasil, and RSX is Russia.
We have avoided Russia because we believe the bad macros (declining population, broken political system) counterbalance the good (rich in commodities); if we were to consider it, we’d wait for another down spike in commodity valuations to get in at a bargain price.
The other two in theory could be interesting investments, but in practice they are much too thinly capitalized and thinly traded—BRF for us to consider as recommendations. We won't recommend any ETF south of $100MM/100M shares average daily volume and we prefer $0.5B cap and 500,000 shares/day.
Good call. I agree. I've owned this ETF in the past, and will likely own it again very soon.
--Gar
So, what is happening to this ETF (and others) if it goes from a fundamental to a non-fundamental.? What does that mean anyway?
I have 45% gains as of June ,, I watch them very close.