Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

What Are Italian Stocks Doing In The Argentina ETF?

Tue, Nov 6, 8:15 AM ET, by Michael Johnston

With lackluster earnings and substantial political uncertainty in the U.S. and European markets leaving many investors unimpressed, the recent trend of investing in emerging and frontier markets figures to continue for the foreseeable future. As investors shed their home country bias and look to beef up the international allocations in their portfolios, many are exploring economies that were previously hard to access. Thanks in large part to the ETF boom, investors of all levels of wealth and sophistication have the ability to invest in markets around the world. Emerging markets are no longer limited to the major players of the BRIC; there are country-specific ETFs targeting everything from Colombia to the Philippines to Vietnam [try Free ETF Country Exposure Tool].

When evaluating foreign ETFs, many investors have noticed that the composition of the underlying portfolio doesn’t quite match up with what they might have expected. For example, the Global X Argentina ETF (ARGT, C+) has only about 75% of its holdings are companies based in Argentina. The other quarter is spread between Canadian, Chilean, and American investments that have some operation in Argentina [see Seven Surprising ETF Holdings].

That might seem strange–and even suspicious–but it’s simply a nuance of international equity ETFs. Below, we take a deeper dive into ARGT to explain why the country allocations you see on many international ETFs might not make immediate sense.

As Argentina has opened its economy, many companies headquartered elsewhere in the world have rushed in to invest in the abundance of natural resources and other assets. As a result, many of the companies that operate primarily in Argentina are actually headquartered thousands of miles away–often on an entirely different continent–and have their primary listing on an exchange far from Buenos Aires. The result doesn’t necessarily diminish the correlation to the local Argentinian markets–these stocks often react to the local economy–but it does produce a puzzling country allocation [see Latin America ETFdb Portfolio].

Natural Gas and Oil

As the largest natural gas producer in Latin America, many Canadian companies that feel the northern markets are over saturated have ventured south in search of better returns. As a key player in oil production in Latin America, Argentina used to export a fair amount of excess oil to Brazil. However, consumption is quickly catching up with production, now requiring the import of oil which makes up a third of the oil used annually. This shift has created even more interest from northern companies that have more advanced and efficient refining and production methods [see also ETFs To Play 9 Markets in Limbo].

Tenaris SA is a large manufacturer of piping for oil and gas pipelines, and has major operations in Argentina. But the company is actually headquartered in Luxembourg and shows up in the portfolio breakdown as an Italian stock since it’s listed on the Borsa Italiana.

Tenaris is the largest individual holding in ARGT at almost 19% of total assets.

Retail

Many of the Latin American retail companies operate outside of their home country, including Cencosud, the Chilean solution to Walmart. With Jumbo stores around Latin America, this shopping super center might as well call Argentina home since it now has more locations here than in Chile. This might partly be due to the fact that Argentina has nearly triple the population of Chile and Cencosud bought out all of its Argentinian rivals, but as the third largest retailer, it still has to fight with Brazilian Groupo Pao de Acucar and Mexican Walmart de Centroamerica for consumers [see ETFs For The World's Most Valuable Emerging Market Brands].

Cencosud, which makes up about 4% of ARGT, accounts for the Chilean components of this ETF.

Precious Metals

The majority of foreign investments in Argentina are interested in mining and refining of metals like gold, silver, copper, and aluminum. While it is not one of the largest metal producing countries, Argentina is right next to Chile where many Canadian and American corporations have already set up shop and are expanding quickly looking for new opportunities. It may not have the amazing copper reserves of Chile, but Argentina is the 3rd largest global producer of boron, a metal used in glass, detergents, industrial magnets, and when combined with carbon create a highly durable compound that is used in the making of bulletproof vests [see also Everything You Need To Know About Frontier ETFs].

A handful of Canadian and U.S. mining companies, including Pan American Silver, Yamana Gold, Silver Standard Resources, and Goldcorp are found in the ARGT’s portfolio as they have substantial operations in the country.

Bottom Line: Nothing To Fret About

Though we highlighted ARGT, that fund is certainly not the only international equity ETF that consists of stocks that appear to be from other markets. The Russia ETF (RSX, B-) appears to have components from the U.K. and the Netherlands. The Vietnam ETF (VNM, C+) has components listed primarily in Thailand, Canada, Malaysia, and India. Even SPY technically has minor allocations to Switzerland and Ireland.

There are hardly any companies existing now that operate exclusively in one country; most generate revenue on multiple continents and in dozens of nations. In an increasingly interconnected global economy, sometimes the best way to get exposure to Argentina is through a company headquartered in Canada or Luxembourg.

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]

Disclosure: No positions at time of writing.

Click here to read the original article on ETFdb.com.


SDI Glossary: "ETFs" Definition
This Article's Word Cloud:   ARGT   America   American   Argentina   Canadian   Cencosud   Chile   Chilean   ETFdb   ETFs   Emerging   Latin   Silver   This   Vietnam   allocations   companies   components   copper   country   economy   from   global   have   headquartered   home   including   international   investments   investors   largest   listed   many   markets   might   mining   more   only   operate   operations   other   portfolio   production   quickly   stocks   that   their   third   used   with

| More

XL Group Moves Up In Analyst Rankings, Passing Stryker
Fri, Nov 21, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

RWX Makes Bullish Cross Above Critical Moving Average
Fri, Nov 21, 11:34 AM ET, by ETF Channel

In trading on Friday, shares of the SPDR Dow Jones International Real Estate ETF (RWX) ...

BLDRS Emerging Markets 50 ADR Index Fund Breaks Above 200-Day Moving Average - Bullish for ADRE
Fri, Nov 21, 11:34 AM ET, by ETF Channel

In trading on Friday, shares of the BLDRS Emerging Markets 50 ADR Index Fund ETF ...

Guggenheim Timber (CUT) Shares Cross Above 200 DMA
Fri, Nov 21, 11:34 AM ET, by ETF Channel

In trading on Friday, shares of the Guggenheim Timber ETF (CUT) crossed above their 200 ...

iShares Asia 50 Breaks Above 200-Day Moving Average - Bullish for AIA
Fri, Nov 21, 11:34 AM ET, by ETF Channel

In trading on Friday, shares of the iShares Asia 50 ETF (AIA) crossed above their ...

First Trust Materials AlphaDEX Fund (FXZ) Shares Cross Above 200 DMA
Fri, Nov 21, 11:34 AM ET, by ETF Channel

In trading on Friday, shares of the First Trust Materials AlphaDEX Fund ETF (FXZ) crossed ...

AXJL Makes Bullish Cross Above Critical Moving Average
Fri, Nov 21, 11:24 AM ET, by ETF Channel

In trading on Friday, shares of the Asia Pacific ex-Japan ETF (AXJL) crossed above their ...

JPP Crosses Above Key Moving Average Level
Fri, Nov 21, 11:24 AM ET, by ETF Channel

In trading on Friday, shares of the SPDR Russell/Nomura PRIME Japan ETF (JPP) crossed above ...

DRW Makes Bullish Cross Above Critical Moving Average
Fri, Nov 21, 11:24 AM ET, by ETF Channel

In trading on Friday, shares of the WisdomTree Global ex-U.S. Real Estate Fund ETF (DRW) ...

iShares iBoxx $ Investment Grade Corporate Bond ETF Experiences Big Inflow
Fri, Nov 21, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: LQD Exchange traded funds (ETFs) trade just like stocks, but ...

IWP, VRTX, MHFI, INTU: Large Inflows Detected at ETF
Fri, Nov 21, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWP, VRTX, MHFI, INTU Exchange traded funds (ETFs) trade just ...

IWV, MA, HON, TWX: Large Inflows Detected at ETF
Fri, Nov 21, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWV, MA, HON, TWX Exchange traded funds (ETFs) trade just ...

12.6% of XHB Holdings Seeing Recent Insider Buys
Fri, Nov 21, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR S&P Homebuilders ETF (XHB) shows ...

First Trust RBA American Industrial Renaissance ETF -- Insider Buying Index Registering 15.6%
Fri, Nov 21, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the First Trust RBA American Industrial Renaissance ...

AES Moves Up In Analyst Rankings, Passing TE Connectivity
Thu, Nov 20, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

AGG: Large Inflows Detected at ETF
Thu, Nov 20, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: AGG Exchange traded funds (ETFs) trade just like stocks, but ...

Vanguard FTSE Developed Markets ETF Experiences Big Inflow
Thu, Nov 20, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VEA, NSRGY, NVS, TM Exchange traded funds (ETFs) trade just ...

DIA, V, GS, IBM: Large Inflows Detected at ETF
Thu, Nov 20, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: DIA, V, GS, IBM Exchange traded funds (ETFs) trade just ...

EDZ Crosses Above Key Moving Average Level
Wed, Nov 19, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the Daily Emerging Markets Bear 3x Shares ETF (EDZ) ...

ConocoPhillips Takes Over #116 Spot From Mallinckrodt
Wed, Nov 19, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

SMB Crosses Below Key Moving Average Level
Wed, Nov 19, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the Short Municipal Index ETF (SMB) crossed below their ...

SPDR Barclays Long Term Corporate Bond (LWC) Shares Cross Below 200 DMA
Wed, Nov 19, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR Barclays Long Term Corporate Bond ETF (LWC) ...

IYLD Makes Notable Cross Below Critical Moving Average
Wed, Nov 19, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Morningstar Multi-Asset Income ETF (IYLD) crossed below ...

AAXJ Makes Notable Cross Below Critical Moving Average
Wed, Nov 19, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI All Country Asia ex Japan ETF ...

KRE, WAL, MBFI, ONB: Large Outflows Detected at ETF
Wed, Nov 19, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: KRE, WAL, MBFI, ONB Exchange traded funds (ETFs) trade just ...

PGX: Large Inflows Detected at ETF
Wed, Nov 19, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: PGX Exchange traded funds (ETFs) trade just like stocks, but ...

PPA, LMT, NOC, RTN: Large Inflows Detected at ETF
Wed, Nov 19, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: PPA, LMT, NOC, RTN Exchange traded funds (ETFs) trade just ...

FXG, STZ, HAIN, PPC: ETF Inflow Alert
Wed, Nov 19, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: FXG, STZ, HAIN, PPC Exchange traded funds (ETFs) trade just ...

ILF, ITUB, BBD, PBR.A: ETF Outflow Alert
Wed, Nov 19, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: ILF, ITUB, BBD, PBR.A Exchange traded funds (ETFs) trade just ...

13.1% of XBI Holdings Seeing Recent Insider Buys
Wed, Nov 19, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR S&P Biotech ETF (XBI) shows ...

Shares of IGHG Now Oversold
Tue, Nov 18, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the Proshares Investment GradeInterest Rate Hedged ETF (IGHG) entered ...

AMPS Crosses Below Key Moving Average Level
Tue, Nov 18, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Utilities Bond ETF (AMPS) crossed below their ...

EEV Makes Notable Cross Below Critical Moving Average
Tue, Nov 18, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the Proshares UltraShort MSCI Emerging Markets ETF (EEV) crossed ...

MONY Crosses Above Key Moving Average Level
Tue, Nov 18, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Financials Bond ETF (MONY) crossed above their ...

Newfield Exploration Moves Up In Analyst Rankings, Passing Avago Technologies
Tue, Nov 18, 12:14 PM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

EIDO Makes Bullish Cross Above Critical Moving Average
Tue, Nov 18, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the iShares MSCI Indonesia ETF (EIDO) crossed above their ...

CBND Crosses Below Key Moving Average Level
Tue, Nov 18, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR Barclays Issuer Scored Corporate Bond ETF (CBND) ...

SPLV, CB, TRV, ACE: ETF Inflow Alert
Tue, Nov 18, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: SPLV, CB, TRV, ACE Exchange traded funds (ETFs) trade just ...

IVW, UNP, MMM, ABBV: Large Inflows Detected at ETF
Tue, Nov 18, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IVW, UNP, MMM, ABBV Exchange traded funds (ETFs) trade just ...

IDV: ETF Inflow Alert
Tue, Nov 18, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IDV Exchange traded funds (ETFs) trade just like stocks, but ...

iShares U.S. Medical Devices ETF Experiences Big Outflow
Tue, Nov 18, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IHI, TMO, COV, BAX Exchange traded funds (ETFs) trade just ...

10.2% of IESM Holdings Seeing Recent Insider Buys
Tue, Nov 18, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the iShares Enhanced U.S. Small-Cap ETF (IESM) ...

16.2% of DIV Holdings Seeing Recent Insider Buys
Tue, Nov 18, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SuperDividend U.S. ETF (DIV) shows an ...

WisdomTree China Dividend ex-Financials Fund (CHXF) Shares Cross Below 200 DMA
Mon, Nov 17, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the WisdomTree China Dividend ex-Financials Fund ETF (CHXF) crossed ...

USMV, PEP, ABC, BDX: Large Inflows Detected at ETF
Mon, Nov 17, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: USMV, PEP, ABC, BDX Exchange traded funds (ETFs) trade just ...

IWN, RLJ, PB, LHO: ETF Inflow Alert
Mon, Nov 17, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: IWN, RLJ, PB, LHO Exchange traded funds (ETFs) trade just ...

Coca-Cola a Top Ranked SAFE Dividend Stock With 2.9% Yield (KO)
Mon, Nov 17, 8:14 AM ET, by ETF Channel

Coca-Cola Co (KO) has been named to the Dividend Channel ''S.A.F.E. 25'' list, signifying a ...

MRO Named A Top Socially Responsible Dividend Stock
Mon, Nov 17, 8:14 AM ET, by ETF Channel

Marathon Oil Corp. (MRO) has been named a Top Socially Responsible Dividend Stock by Dividend ...

YANG Crosses Critical Technical Indicator
Fri, Nov 14, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the Daily FTSE China Bear 3x Shares ETF (YANG) ...

Ryder System Achieves #83 Analyst Rank, Surpassing Express Scripts Holding
Fri, Nov 14, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

Related videos | all videos »
  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

What Are Italian Stocks Doing In The Argentina ETF? | Self Directed Investor | Copyright © 2008 - 2014, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of over 1000 individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.