Brazil, just like other emerging BRIC markets, seems to be well positioned for new growth opportunities. Brazil, Russia, India and China will likely have years, if not decades, of tremendous growth in their futures when compared with the developed markets. (For background reading, see Investing In Brazil 101.)


In Pictures: 5 Investing Statements That Make You Sound Stupid

The Brazilian economy is the 10th largest economy in the world. During the period 2004-2008, the economy grew at the rate of 4-5% on average. Many would consider this growth rate to be less impressive than those seen in China and India, but things really picked up in 2009; Brazil's stock market index, the Bovespa went up by 83%, barely beating China's Shanghai Composite Index return of 79% and India's 81% return as measured by the Sensex 30.

Brazil has a few key things going for it: It is is one of the few countries in the world that is self-sufficient in oil; it is a leader in alternative energy sources; it produces more ethanol than Asia and Europe combined; it is also the second-largest producer of iron ore in the world. So, all things considered, investors interested in Brazil should focus on commodities, infrastructure, and even housing. After all, as the nation changes its focus from rural to urban living, the basic demands of a growing middle class will need to be met.

Investors can generally invest in Brazil by holding sector ETFs. The most notable of these include iShares MSCI Brazil Index Fund (NYSE:EWZ), WisdomTree Dreyfus ETF BZ Real Fnd (NYSE:BZF) and Market Vectors Brazil Small Cap ETF (NYSE:BRF). For those who are interested in buying individual stocks, check out the following list of five hot Brazilian stocks.




Company

Market Cap

YTD % Gain

Cosan (NYSE:CZZ)

3.48B

+51.47%

Ultrapar Holdings (NYSE:UGP)

8.44B

+35.91%

Ambev (NYSE:ABV)

82.74B

+35.71%

Embraer (NYSE:ERJ)

5.22B

+28.43%

Braskem SA(NYSE:BAK)

8.25B

+26.05%



Bottom Line
Brazilian equities are not cheap. As such, they could easily suffer a pullback even as the Brazilian economy grows. However, Brazil is set to enjoy years of prosperity, and investors seeking direct emerging market exposure may want to keep Brazil on a close watch list. (For more, see Forging Frontier Markets.)

Related Articles
  1. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  2. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
  3. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  4. Chart Advisor

    How Are You Trading The Breakdown In Growth Stocks? (VOOG, IWF)

    Based on the charts of these two ETFs, bearish traders will start turning their attention to growth stocks.
  5. Mutual Funds & ETFs

    Pimco’s Top Funds for Retirement Income

    Once you're living off the money you've saved for retirement, is it invested in the right assets? Here are some from PIMCO that may be good options.
  6. Chart Advisor

    Watch This ETF For Signs Of A Reversal (BCX)

    Trying to determine if the commodity markets are ready for a bounce? Take a look at the analysis of this ETF to find out if now is the time to buy.
  7. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  8. Mutual Funds & ETFs

    ETFs Can Be Safe Investments, If Used Correctly

    Learn about how ETFs can be a safe investment option if you know which funds to choose, including the basics of both indexed and leveraged ETFs.
  9. Mutual Funds & ETFs

    The Top 5 Large Cap Core ETFs for 2016 (VUG, SPLV)

    Look out for these five ETFs in 2016, and learn why investors should closely watch how the Federal Reserve moves heading into the new year.
  10. Economics

    India: Why it Might Pay to Be Bullish Right Now

    Many investors are bullish on India for all the right reasons. Does it present an investing opportunity?
RELATED FAQS
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. How do mutual funds work in India?

    Mutual funds in India work in much the same way as mutual funds in the United States. Like their American counterparts, Indian ... Read Full Answer >>
  3. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  4. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  5. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  6. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center