The World Cup kicked off last week as soccer teams from around the globe converged in South Africa. The once-every-four-years tournament is one of the most-watched sporting events in the world; and as you can imagine, it involves large amounts of money for the host country and participants.
There are a few clear-cut favorites to win the 2010 World Cup, and it could boost their economy as consumers spend more money and rejoice in a victory. I have chosen my five favorites to win the tournament based on the FIFA rankings and my own bias. (For related reading, check out The World Cup 2010 Portfolio.)

IN PICTURES: 20 Tools For Building Up Your Portfolio

Europe
iShares MSCI Spain ETF
(NYSE: EWP) is one of the PIIGS of Europe, and the ETF's performance reflects the name, losing 29% so far in 2010. The fact that the ETF has 42% of its assets in two stocks, Banco Santander (NYSE: STD) and Telefonica (NYSE: TEF), makes this a very risky investment. With debt troubles along with unemployment near 20%, it is not a good situation when more than 44% of the ETF is invested in financials. However, the ETF and country are oversold and could rally with a World Cup win.

iShares MSCI Netherlands ETF (NYSE: EWN) is a quiet, yet smart, pick to win the title. The country is similar in the eyes of investors because it is not the most popular choice among international ETFs. The ETF is down 12% in 2010, much better than Spain and in a better situation going forward. The ETF's largest holdings are consumer staples and industrials with Unilever (NYSE: UN) making up 17%. GDP turned positive in the first quarter, and the future looks bright for the orange team.

iShares MSCI Germany ETF (NYSE: EWG) is the largest economy in the Eurozone and is a popular pick to win the World Cup. The ETF is down 14% in 2010 and has avoided some of the mess, but considering it is the largest economy in the continent, it will suffer. The ETF is very diverse with six sectors making up at least 10% of the allocation. Germany is a solid bet to win the tournament and provide solid returns in Western Europe. (For more, see Going International.)

South America
iShares MSCI Brazil ETF
(NYSE: EWZ) is one of the clear favorites to win the tournament and a favorite among investors as well. The country rebounded nicely from the recession in 2009 and has now strung together four consecutive quarters of positive growth capped by a gain of 2.74% in Q1 2010. The ETF has 76 stocks and is heavily weighted toward the materials, energy and financial sectors. Brazil remains my favorite emerging-market country, and it will be hosting the 2014 World Cup and a future summer Olympics.

iShares Chile Investable Market Index ETF (NYSE: ECH) is my Cinderella story and my long shot to win it all. Chile has about the same odds as the U.S., so why not? The Chile ETF consists of 30 stocks that are nicely diversified between the utilities, industrials and materials sectors. Several of the ETF's largest holdings are either at or near all-time highs. Lan Airlines (NYSE: LFL) closed out last week at the best level ever. The country's stock market often moves with the price of copper due to the fact it accounts for about half of the GDP. ECH is an aggressive play, though it does have upside with a worldwide economic rebound.

Final Pick
At the end of the day, my heart goes with the U.S. (not listed). But if I were forced to choose, it would be with Brazil to win the World Cup and Chile to provide the best return for the remainder of 2010. (For more, see Broadening The Borders Of Your Portfolio.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  2. Mutual Funds & ETFs

    ETF Analysis: ProShares UltraPro Nasdaq Biotech

    Obtain information about an ETF offerings that provides leveraged exposure to the biotechnology industry, the ProShares UltraPro Nasdaq Biotech Fund.
  3. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Europe Financials

    Learn about the iShares MSCI Europe Financials fund, which invests in numerous European financial industries, such as banks, insurance and real estate.
  4. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P Insurance

    Learn about the SPDR S&P Insurance exchange-traded fund, which follows the S&P Insurance Select Industry Index by investing in equities of U.S. insurers.
  5. Mutual Funds & ETFs

    ETF Analysis: SPDR S&P Emerging Markets Small Cap

    Learn about the SPDR S&P Emerging Markets Small Cap exchange-traded fund, which invests in small-cap firms traded at the emerging equity markets.
  6. Mutual Funds & ETFs

    ETF Analysis: ETFS Physical Platinum

    Learn about the physical platinum ETF. Platinum embarked on a bull market from 2001 to 2011, climbing to record prices along with other precious metals.
  7. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI Turkey

    Learn about the iShares MSCI Turkey exchange-traded fund, which invests in a wide variety of companies' equities traded on Turkish exchanges.
  8. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  9. Mutual Funds & ETFs

    ETF Analysis: Guggenheim Enhanced Short Dur

    Find out about the Guggenheim Enhanced Short Duration ETF, and learn detailed information about this fund that focuses on fixed-income securities.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares US Oil&Gas Explor&Prodtn

    Learn about the iShares U.S. Oil & Gas Exploration & Production ETF, which provides an efficient way to invest in the exploration and production sector.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  3. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  5. Brazil, Russia, India And China ...

    An acronym for the economies of Brazil, Russia, India and China ...
  6. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
RELATED FAQS
  1. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>
  6. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!