It’s achieved a remarkable degree of energy self-sufficiency – again setting it apart from much of the rest of the world.
Brazil, unlike the United States and other economies, is not over-levered. It has a prudent fiscal and monetary policies, balanced and diversified trade, along with a coherent energy policy.
It leaves the country well positioned for the future.
Another factor working in Brazil’s favor is the huge amount of money that the Federal Reserve is pumping into the U.S. financial system. Whether you agree or disagree with the Federal Reserve’s corrective procedures, one thing is certain – eventually this money printing will result in lower purchasing power for the U.S. Dollar.
This lower purchasing power for the dollar has already begun to fuel a rally in commodity prices. And Brazil – a major producer and exporter of many commodities – is perfectly positioned to take advantage of it.
Easy Ways to Profit From Brazil
There are several easy ways for American investors to participate in the Brazilian growth story. Some of my favorite methods are purchasing Brazilian ETFs. Here are two ETFs that focus exclusively on Brazil:
iShares MSCI Brazil Index Fund (NYSE: EWZ) contains 72 of Brazil’s largest companies. I am a fan of this fund because of the heavy weighting given to two of my favorite commodities companies – oil giant Petrobras (over 24%) and mining giant Vale de Rio (over 16%). It provides an easy way to play two of my major themes – emerging markets and commodities – with one investment.
Van Eck Brazil Small Cap ETF (NYSE: BRF) provides exposure to small-cap companies that are domiciled in Brazil and that generate at least 50% of their revenues in Brazil. This fund gives investors a concentrated play (52 components) on domestic Brazilian investment themes such as consumer goods. However, it does not offer the concentration on commodity plays like EWZ. This fund is relatively new and began trading on May 12, 2009.
More aggressive investors can opt to purchase individual Brazilian stocks that trade here in the U.S. as ADRs, or American Depositary Receipts. There are many Brazilian stocks in various sectors available to American investors.
