Categories: Exchange Traded Funds (ETFs)International InvestingLatin America

You Could be Building Your Portfolio with Brazil’s Infrastructure

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. I also invite you to share your thoughts below.

Doug Fabian

Doug Fabian is the Editor of Weekly ETF Report, a free weekly e-newsletter, and the newsletter Successful ETF Investing. He’s also the host of the syndicated radio show, “Doug Fabian’s Wealth Strategies.” Doug also edits the fast-paced trading service ETF Trader’s Edge, for investors who want to take their profits to the next level. Taking over the reins from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert’s Investment Digest. Doug became a member of the “SmartMoney 30” in 1999 — a listing of the most influential individuals in the mutual fund industry. In the feature, SmartMoney magazine exclaims that Doug is the best-known “trend follower” among the $56 billion (and growing) group of financial advisors. In 2001, Doug wrote “Maverick Investing,” published by McGraw-Hill. He also regularly appears at seminars around the country, stands out on the pages of the largest newspapers (The Wall Street Journal, The Los Angeles Times, and The New York Times), and speaks on national television (CNBC, Fox News, and Bloomberg Forum). For more than 35 years, Successful ETF Investing (formerly the Telephone Switch Newsletter and Successful Investing) has produced double-digit percentage annual gains. Doug has become known for his expert knowledge and timely use of innovative tools, such as exchange-traded funds, bear funds, and enhanced-index funds to profit in any market climate. For more information about Doug’s services, go to http://www.fabian.com/