Playing the Olympics

By ETF Heat Map Team

In the run up to the 2016 Olympics which has a start date of August 5, 2016, many Brazilian stocks have started to run up positively (reflecting the positive expectations of the Olympics being held in Brazil).

A working paper titled  “The Olympic Effect” by Rose and Spiegel published by the National Bureau of Economic Research examines the impact of hosting the Olympics. Specifically, they show that hosting an Olympics has positive impacts on trade exports, approximately 30% higher for countries that have hosted it.  We will preview three Brazil exchange traded funds (ETFs) available in the ETF Heat Map database that trade in the US:

  • EWZ – iShares MSCI Brazil Index (1 month – 20%)

  • BRAQ – Global X Brazil Consumer ETF (1 month – 25%)

  • UBR -ProShares Ultra (2x) MSCI Brazil Capped (1 month – 42%)

EWZ, the iShares MSCI Brazil Capped ETF, tracks the investment results of an index composed of large and midsized Brazilian equities. It’s has a 30 day SEC Yield is approximately 2.52%, expense fees of approximately 0.63% and has returned approximately 78% over the last 6 months.

BRAQ,  Global X Brazil Consumer ETF,  invests in a basket of stocks that operate within the consumer discretionary and consumer staples sectors in Brazil. It has a 30 day yield of approximately 1.20%, management fees of approximately 0.77% and has returned approximately 50% over the last 6 months. It’s top 3 holdings are comprised of Itau Unibanco Holding Pref SA, Ambev SA and Banco Bradesco Pref.

UBR, ProShares Ultra MSCI Brazil Capped, seeks investment results that correspond to two times the daily performance of the MSCI Brazil 25/50 Index. Given its leverage, it has an expense ratio of approximately 0.95% and holds various derivative instruments to provide the leverage to market participants.



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