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Published on Aug 17, 2016
American
athletes are not the only ones winning big in Brazil, investors in the
iShares MSCI Brazil Capped ETF are up 66% year-to-date. Tushar Yadava,
investment strategist at iShares, said the ETF's gold-medal performance
has the momentum to continue despite a rash of headwinds. 'You are
starting to see hope for political progress moving forward and growth is
returning a little bit in terms of expectations,' said Yadava. 'And we
are seeing some small upticks and corporate behavior and those things
combined make the picture a little bit rosier and suddenly you see a lot
of performance after many years of being beaten down.' The $28 billion
iShares MSCI Emerging Markets ETF is up 17% year-to-date, far outpacing
the 7% gain in the S&P 500 over the same period. The fund has 7.5%
of its assets in Brazilian securities, the fifth largest allocation in
the fund behind China (25%), Korea (15%), Taiwan (12%) and India (8%).
According to Yadava, the EEM has seen over $6 billion in inflows this
year as investors finally see emerging market economies turning the
corner after being dragged down by crashing commodity prices and growth
scares. 'Emerging markets have been beaten down for a long time and they
have relatively attractive valuations to developed markets that have
fallen out of favor,' said Yadava. 'And you are also starting to see
ROEs and forward earnings expectations tick up a little bit.' Yadava is
also positive on the iShares MSCI India ETF , up 7% so far in 2016,
saying the country is finally benefiting from economic reforms and the
stabilization of commodity prices. 'Over the longer term, this is one of
the economies with one of the greatest demographic profiles in the
world,' said Yadava. Finally, Yadava said the iShares JPMorgan USD
Emerging Markets Bond ETF , up 11% thus far in 2016, could continue to
see gains in 2016, despite rising concerns about an overextended debt
market
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