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Which Argentina ETF Should You Consider?


If you're looking to diversify your portfolio, Argentina ETFs are worth considering. According to Benzinga, Argentina became a frontier market, with the previous status as an emerging market. It occupies a 19 percent weight in the iShares MSCI Frontier 100 ETF. Argentina occupies the largest weight of any country in this ETF. For the past three years, investors have taken an interest in Argentina ETFs. Which Argentina ETFs are the best choices? Here are the comparisons.

5. Global X MSCI Argentina ETF (ARGT)

The Global X MSCI Argentina ETF invests a minimum of 80 percent of the total assets of the firm in ADR securities and GDRs based on the underlying index securities. The index represents the performance of the Argentina equity arena as a whole and includes the smallest number of constituents. This is a non-diversified fund. The top 10 holdings of the group include Globant SA, Mercado libre Inc, Embotelladora Andina SA Participating Preferred, SSR mining INC, United Breweries Co Inc, Cencosud SA, Banco Macro SA, Telecom Argentina SA, Grupo Financiero Galicia SA, and Pampa Energia SA. The holdings represent sector exposure in consumer discretionary, information technology, consumer staples, financials, materials, energy, utilities, communication services, and real estate weighted in that order. Industry exposure is weighted in software, internet and direct marketing retail, banks, beverages, oil, gas & consumable fuels, metals and mining, food and staples retailing, electric utilities, diversified telecommunication services, and hotels, restaurants, and leisure. The total assets of ARGT are $38.82 million, according to iShares by Black Rock.

4. iShares MSI Argentina and Global Exposure ETF AGT

According to EFTDB, AGT is one of two EFT firms that focus exclusively on Argentine equities. AGT has a portfolio that is comprised of a few dozen company stocks which are the largest and the most liquid. This fund tracks an MCI index of these companies. Requirements for the contract include a minimum of ten percent of revenue from Argentina. No single stock within the portfolio may be more than 25% in weight within the portfolio. The companies included can not be weighted more than five percent of fifty percent combined. Additionally, companies within this portfolio must be adjusted for free float and market, cap-weighted, and listing on local markets is required. The issuer is iShares under the Global Equities category in the equity asset class, multi-cap asset class size in a blended asset class style in the general Latin America region, specifically Argentina. The AUM is $6 million.

3. AdvisorShares Dorsey Wright ADR ETF (AADR)

EFTDB reports that this ETF is an actively managed fund that focuses on global equity markets, offering exposure to US-based and emerging markets stock listings. AADR seeks to identify global equity securities that are the most promising. A benefit of AADR is its inexpensiveness, less than ost mutual funds in its category. It's a one-stop global equity exposure comprised of a small number of holdings with low-cost index-based alternatives. It alls in the Foreign large-cap equities category in the equity class of multi-cap size and blend asset class style in the general global region with a broad specific. The AUM is $78.9 million.

2. Xtrackers J.P. Morgan ESG Emerging Markets Sovereign ETF (ESEB)

The ESEB ETF falls in the category of emerging markets bonds as of October of 2020. ESED uses the ESG method of tracking the debt index issued by governments in the emerging market. Simultaneously, environmental, governance, and social factors of the securities are screened. Issuers are then sorted into five separate tiers, based on scores generated through the ESG criteria in a screening process that removes the lowes tier. Companies excluded from ESEB are any company in violation of principles of the UN Global Compact or those that committed violations related to weapons, tobacco, and thermal coal. Those with the highest ESG scores receive the most weight. Those earning a green designation from the Climate Bond Initiative move up one tier in weighting. ESEB combines emerging market debt with ESG screening which makes it unique. Another attractive feature is the lower cost of the management fee in this sector. The bond duration is zero and the emerging markets are specified as a broad region. The AUM is $21.6 million with shares at 1.0 million, according to ETFDB.

1. Emerging Markets Internet & Commerce ETF (EMQQ)

The Emerging Markets Internet & Commerce ETF is issued by Exchange Traded Concepts. The inception took place on November 12, 2014. The Index tracked is the Emerging Markets Internet and Ecommerce Index. The category is Foreign Large Cap Equities under the equity asset class in the multi-cap size and Blend class style. The Emerging Markets Internet & Commerce ETF provides exposure to Argentina's largest markets. The markets are in the general technology sector. They are specific to the internet. The general region is emerging markets with a broad specific. The AUM is $978.9 million, according to EMQQ.

Final thoughts

Former views of Latin America held it as a highly unstable region due to political unrest, coups, and financial crises. Over the past decade, Latin America has transformed and recognized as a vital contributor to global economic growth. Argentina has experienced a current year growth of 4.2 percent. There is anticipation that the GDP will continue on this trajectory of positive growth progress. Efforts to reduce debt and companies restructuring balance sheets with a renewed focus on core skills have shown a positive impact on earnings and profitability. Governments have done their part to create an environment that supports healthy economic growth. The combination of these positive factors has resulted in direct foreign investment that has given the government finances a boost. The economy has balanced. The middle class is thriving. Consumption led growth is currently taking place with enhanced earnings that provide regional spending power. Investors find the changes appealing. The trend has emerged in the form of increased confidence in EFTs that offer exposure to Argentina markets, as indicated in our five top recommended EFTs.

Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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