March 4, 2011

Want Exposure to Latin America? Global X Launches Argentina ETF

Sixth Global X ETF tracking FTSE indexes on the continent joins a dozen other ETFs from other providers

Global X, the New York-based exchange-traded funds sponsor with $1.5 billion in managed assets, launched Thursday the Global X FTSE Argentina 20 ETF (ARGT), which tracks the FTSE Argentina 20 Index. That index, according to FTSE, includes the 20 largest, most liquid companies that are not listed in Argentina—the second largest economy on the continent as measured by GDP—but that “directly participate in the Argentine economy,” including ADRs, all of which are U.S. RIC-compliant.

Global X already offers five Latin American ETFs that track indexes on Brazilian consumer (BRAQ), financial (BRAF) and mid-cap companies (BRAZ), a Colombian ETF (GXG), and the Andean 40 ETF (AND), based on an index that covers the most liquid companies on the Chilean, Colombian and Peruvian stock exchanges.

The company says ARGT is the first ETF globally to target Argentina, and Global X CEO Bruno del Ama (left), said in a statement that the new ETF provides a “relatively cost-effective way” to access Argentina, which the 2010 CIA Factbook reports is the second largest corn exporter and third largest soy exporter in the world. Del Ama says ARGT fills a “glaring hole” in the ETF universe. As of Feb. 22, 2011, the company said the three largest components in ARGT were Tenaris S.A. ADS, MercadoLibre Inc., and Banco Macro S.A. ADS.

Other ETFs that track South American equities include:

  • Direxion Latin America Bull 3X shares (LBJ)
  • EG Shares Brazil Infrastructure (BRXX)
  • iShares MSCI Brazil Index (EWZ)
  • iShares MSCI Brazil Small Cap Index (EWZS)
  • iShares MSCI Chile Investable Market Index (ECH)
  • iShares MSCI Mexico Investable Market Index (EWW)
  • iShares S&P Latin America 40 Index (ILF)
  • Market Vectors Brazil Small-Cap ETF (BRF)
  • Market Vectors Latin America Small-Cap Index ETF (LATM)
  • ProShares Ultra MSCI Brazil (UBR)
  • ProShares Ultra MSCI Mexico (UMX)
  • SPDR S&P Emerging Latin America (GML)

On March 3, Cerulli Associates reported that ETFs hit a significant milestone in January 2011, crossing the $1 trillion in assets threshold. In it latest edition of The Cerulli Edge: U.S. Monthly Product Trends, the Boston-based research and consulting firm said U.S. and international stock ETFs now account for 75% of all ETF assets, up from 72.5% in January 2010. Commodities and international stock asset classes both experienced a decrease in market share since January 2010 of almost 1%.

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