business

Issues with Global X MSCI Argentina ETF Holdings

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:

  • 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.

  • 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.

  • 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.

  • 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:

  1. Reform Efforts: Either reshaping institutions like the UN and multilateral banks or…
  2. 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:

Recent Performance Chart

Long-term outlook:

Long-term Performance Chart

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:

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 🌟