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

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. Mutual Funds & ETFs

    Why ETFs Are a Smart Investment Choice for Millennials

    Exchange-traded funds offer an investment alternative to cost-conscious millennials who want to diversify their portfolios with less risk.
  2. Investing

    Asset Manager Ethics: Acting With Competence and Diligence

    Managers must make investment decisions based on their personal investment process, which in turn should be based on solid research and due diligence.
  3. Forex Education

    Understanding The Income Statement

    Learn how to use revenue and expenses, among other factors, to break down and analyze a company.
  4. Stock Analysis

    Will J.C. Penney Come Back in 2016? (JCP)

    J.C. Penney is without a doubt turning itself around, but that doesn't guarantee the stock will respond immediately.
  5. Mutual Funds & ETFs

    Should Investors Take a BITE Out of This New ETF?

    ETF BITE offers a full menu of restaurants. Is now the right time to invest?
  6. Financial Advisors

    5 Things All Financial Advisors Should Know About ETFs

    Discover five things all financial advisors should know about ETFs, including when ETFs may be a better choice for your clients than mutual funds.
  7. Stock Analysis

    The Top 5 ETFs to Track the Nasdaq in 2016

    Check out five ETFs tracking the NASDAQ that investors should consider heading into 2016, including the famous PowerShares QQQ Trust.
  8. Investing

    Time to Bring Active Back into a Portfolio?

    While stocks have rallied since the economic recovery in 2009, many active portfolio managers have struggled to deliver investor returns in excess.
  9. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  10. Chart Advisor

    Now Could Be The Time To Buy IPOs

    There has been lots of hype around the IPO market lately. We'll take a look at whether now is the time to buy.
  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 >>

You May Also Like

Trading Center