Its Bovespa stock index, in dollar terms, is up more than fivefold since January 2004.
Foreigners now account for about 35% of trading on Bovespa, up from 25% two years ago.
ECONOMIST: Lula, champion of equality, has been good for equities
This has helped Bovespa lure back some of the trades it lost as Brazilian companies listed abroad.
ECONOMIST: Lula, champion of equality, has been good for equities
Brazil's benchmark stock market index, the Bovespa, is hovering around an alltime high, and the economy is booming.
The iShares MSCI Brazil exchange traded fund, which tracks the Bovespa exchange, is up 2.25% over the same period.
However, what I puzzle over is the impact on the BOVESPA of the reduced export competitiveness of the currency?
Like its Mexican counterpart though, the Sao Paulo Stock Exchange's benchmark Bovespa index was 0.03% lower at 59, 253 points.
By the end of the summer, the bankruptcy of Lehman Brothers took the Bovespa even lower, trimming well over 30, 000 points.
FORBES: Brazil's Upgrade Doesn't Surprise Market; Watch for EWZ $80 Before Pullback
Bovespa provides trading, clearing, custody, and other services with regulation of the financial markets by the Securities and Exchange Commission of Brazil.
FORBES: American Superconductor Would Be Better Off In Brazil
In the last three months, Bradesco and Itau are up over 7% while the Bovespa is up around 4.5% in dollar terms.
According to Economatica, an equity analysis service covering companies across Latin America, the Bovespa hit the second-highest trading volume in its history this October.
So while oil major Petrobras accounts for 13% of the Bovespa index, and therefore the iShares Brazil ETF, it accounts for just 9.4% in the mutual fund.
FORBES: How the Dreyfus Brazil Mutual Fund Beats the Brazil ETFs
Many analysts reckon it was an overdue correction after some feverish buying, particularly of Telebras, the state-controlled telecoms holding company whose shares account for 45% of the Bovespa index.
Meanwhile, the MSCI Brazil index, which tracks the Bovespa, is down 9.5 percent year to date while the MSCI Emerging Markets index is up 7.96 percent over the same period.
Traditional Brazil investors have done poorly, while investors who were picking up consumer stocks traded on the Bovespa stock exchange last year did well if they had access to a local broker.
Brazil joined the investment grade club in April and May 2008, sending the local Bovespa stock index to an all time high before profit taking took it lower in the summer of 2008.
FORBES: Brazil's Upgrade Doesn't Surprise Market; Watch for EWZ $80 Before Pullback
While 50% of GDP is driven by services, excluding financials, the BOVESPA is crowded and concentrated, with eight stocks making up more than half of the market cap of the exchange: Petrobras, Vale, Itau Unibanco, Ambev, Bradesco, Banco do Brasil, Santander, and OGX.
FORBES: Brazilian Funding Needs Provide Private Equity Opportunity
So while the iShares ETF is heavily weighted towards the big commodity names like Petrobras (PBR) and Vale (VALE), because that is how the Bovespa index actually looks, the Dreyfus fund can mix it up and invests in companies that are not listed on the Bovespa index.
FORBES: How the Dreyfus Brazil Mutual Fund Beats the Brazil ETFs
应用推荐