As the fifth-largest country in the world in terms of both square mileage and population, Brazil places great importance on its infrastructure. When the country hosted this year’s World Cup soccer tournament, visitors poured into Brazil from across the globe to 12 stadiums spread across the host nation, testing the limits of this infrastructure. And Brazil is not done with hosting the influx of visitors that an international sporting event can bring; the country will be the site of the 2016 Olympic Summer Games. If you believe Brazilian infrastructure is a sector with potential, you can take a look at EGShares Brazil Infrastructure (BRXX).
This non-diversified fund tracks the results of an index representing the performance of the 30 largest Brazilian companies that compose Brazil’s infrastructure industries. BRXX is down 3.58% for the year, though it has bounced back from an early-2014 decline and March lows. It offers a dividend yield of 3.33%.
As an infrastructure fund, BRXX has representative sector weightings: utilities, 42.84%; industrials, 26.26%; basic materials, 14.89; with smaller allocations to energy, communication services and healthcare.
This exchange-traded fund (ETF) positions 50.71% of its total assets in its top 10 holdings. The top five of these stocks are: Sid Nacional-ON, 6.09%; Cemig-PN N1, 5.28%; Tractebel Energia SA, 4.99%; Telefonica Brasil Pfd, 4.96%; and All America Latina Logistica SA, 4.94%.
As Brazil gears up to host another global sporting event, with related venue construction and tourism capacity upgrading, Brazilian infrastructure will continue to be supported by additional government monies for the special event. If you think this spending means a bright future for Brazil’s infrastructure, you may want to consider an investment in EGShares Brazil Infrastructure (BRXX).
If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.
In case you missed it, I encourage you to read my article from last week about the Brazilian consumer sector.
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for January 26th, 2014 | John Ransom