It has been about a year since Javier Milei was elected in Argentina 🇦🇷, making it a good time to reassess the performance of the Argentina ETF and its various holdings—some of which may provide a more effective means of gaining exposure to this tumultuous market. 📈
Global X MSCI Argentina ETF (NYSEARCA: ARGT) 📊
I previously analyzed the ETF’s holdings prior to Argentina’s elections in September 2023, when the ETF Boasted a P/E ratio of 11.52 and a yield of 1.55%. This review also included links and resources detailing the challenges Argentina has faced. To summarize some of these issues, here’s a light-hearted meme that reflects the situation. 😂
Insights from Economists 🧠
In a December 13, 2023 post, I highlighted a podcast featuring economists Tom Luongo and Alex Krainer discussing Javier Milei. They revealed some fascinating insights that you won’t find in the mainstream media 📰:
🎙️ Podcast Episode #163 – Alex Krainer on Economic Shifts (Listen Time: 1:22:41) 🎧
Their discussion primarily covered:
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Dollarization Concerns: Luongo described dollarization as a "Wall Street thing" and indicated there’s a drive to open Argentina for proper resource development. He pointed to the shrinking investment options in the West as BRIC nations expand.
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Risks of Dollarization: According to Krainer, while dollarization might produce attractive GDP metrics temporarily, it could ultimately transform Argentina into a dependency, particularly if it mimics past patterns when privatization led to the collapse of essential services.
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Legislative Challenges: Both agreed that Milei’s frustrations with "wokery" are complicated by the overarching influence of Western institutions like the IMF and World Bank.
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Skepticism About Milei: They suggested that Milei gives off a "cartoonish" vibe and often deflects deeper questions regarding his policy implications, raising doubts about his competence.
- Desire for Stability: With rampant inflation, Argentines long for financial stability, a plea echoed in calls for defaulting on the IMF debt.
The Bigger Picture 🌍
The podcast flowed into a discussion about addressing odious debts affecting many developing nations:
- Reform Efforts: Either reshaping institutions like the UN and multilateral banks or…
- Shifting Alliances: Move towards partnerships with BRIC nations to create new frameworks.
This strategy suggests potential room for growth for China and Russia, who can provide support if a country decides to confront their Western debts.
Tracking Performance 📈
As for the economic health of Argentina, here’s a snapshot of some data that might help gauge Milei’s effectiveness in improving the economy:
Recent Performance of the Argentina ETF 📈
Here’s how the Argentina ETF has performed during the COVID-19 period:
Long-term outlook:
Current Holdings 🎯
Interestingly, exposure to the eCommerce giant MercadoLibre (NASDAQ: MELI) has decreased to approximately 20%.
MercadoLibre Overview:
- Latin America’s version of Amazon, has shown resilient recovery post-COVID and is pivotal to the region’s eCommerce and fintech landscapes 🌐.
Short Description of Holdings 🏢
The ETF comprises several stocks that derive a portion of their revenues from Argentina, suggesting that those seeking direct exposure should analyze the individual holdings closely 👀. Companies like Banco Macro and Arcos Dorados Holdings operate in this sphere, providing essential services to locals.
To make informed investment decisions, check out the suggested links below:
- Adecoagro (NYSE: AGRO)
- Banco Macro (NYSE: BMA)
- Arcos Dorados (NYSE: ARCO)
With inflation and currency devaluations affecting many investments, understanding the context and the individual stocks within the ETF is crucial for potential investors. 💰
🌟 Start investing today! https://bit.ly/3BPlKu8 🌟