Opinions
Larry Berman CFA, CMT, CTA
Ishares Msci Brazil Index Fund
EWZ-N
COMMENT
Nov 01, 2021
Stock price when the opinion was issued
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If you were to go back multiple years, you'd see a pattern that has a lid and a floor. There's a pretty strong layer where we are right now. He's traded this multiple times, and he's doing it again.
When oil moves back up again in the winter, which it often does, this ETF with 22% oil & gas should too. Remember that if it breaks support, get out. Don't get emotionally wrapped up in the trade.
Whatever happens in the US affects the rest of the world. He wouldn't recommend emerging markets, as they tend to underperform if/when there's a recession.
Investors would be better off buying the best companies in the German market, rather than the whole German market. Germany's the 4th-largest economy in the world, but it's had a bunch of issues with its own deficit and economic slowdown. He owns specific stocks in Europe.
We are not experts on Brazil, and it has certainly had some economic issues of late. Still, the Brazil market is nicely ahead of the US this year, and positive on the year. EWZ is up 10.17% YTD. Certainly for investors looking for country exposure we would be comfortable with this ETF, with $3.2B in assets, fees of 0.59% and an 8% yield currently. Brazil stocks are very cheap, at nearly half the valuation of the US market. There are still risks, but for a generalized country fund we would be OK with this as part of a diversification strategy for sophisticated investors looking for non-correlated assets from North America. We would not want to go beyond 5%.
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