Buying into Brazil again
One Brazilian ETF is down nearly 14% from its January high. Its domestic small-company portfolio is appealing.
Well, actually I think Friday was a time to buy BRF again -- before a recommendation from Goldman Sachs to buy the Brazilian real sent the Brazilian stock market flying.
But the ETF is still down 9% from my sell and off almost 14% from its Jan. 4 high, so despite today's rally, I'm going to pull the trigger. (Readers have more flexibility than I do on buying. You should certainly consider buying half a position today and adding to it on any volatility.)
For more on how Brazil might be diverging from China's ongoing correction, see this post.
BRF targets medium-sized and small companies that get at least 50% of their revenue from the domestic Brazilian market. (Average market capitalization of the fund's holdings is $1.7 billion, according to Morningstar. Average market cap at EWZ is $36.2 billion.)
As a result, about 40% of the fund is invested in shares of consumer discretionary and consumer staples companies that sell to Brazilians (You can find more on the Market Vectors Brazil ETF on its Web page).
Right now with this buy, you get a chunk of the Brazilian economy, which is projected to grow by 5% or better in 2010, and exposure to the real, which after an 8% slide in January, looks likely to rally in 2010 as the Brazilian central bank starts to raise interest rates to head off inflation. (Yes, higher rates will slow the economy, but I think that's baked into the forecast.)
I'm adding these shares to Jubak's Picks with a target price of $54.50 by October 2010.
Jim Jubak plans to buy shares of this ETF for his personal portfolio three days after this is posted.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Here's a list of ways to profit from the potential move from defensive to cyclical stocks.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.