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   Argentinian   Canadian   Cencosud   Chile   Chilean   ETFdb   ETFs   Latin   This   actually   allocations   companies   company   components   country   doesn   economy   even   foreign   free   from   global   have   headquartered   here   home   international   investments   investors   largest   many   markets   might   mining   more   northern   operate   other   portfolio   production   that   their   used   which   with   world

| More

Merck a Top Socially Responsible Dividend Stock With 3.0% Yield (MRK)
Mon, Jul 28, 9:24 AM ET, by ETF Channel

Merck & Co., Inc (MRK) has been named a Top Socially Responsible Dividend Stock by ...

Why PepsiCo is a Top 25 SAFE Dividend Stock (PEP)
Mon, Jul 28, 9:24 AM ET, by ETF Channel

PepsiCo Inc. (PEP) has been named to the Dividend Channel ''S.A.F.E. ...

PSCH: Large Inflows Detected at ETF
Fri, Jul 25, 11:14 AM ET, by ETF Channel

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

FBT, ITMN, PCYC, ALXN: Large Outflows Detected at ETF
Fri, Jul 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: FBT, ITMN, PCYC, ALXN Exchange traded funds (ETFs) trade just ...

XLF, AXP, USB, COF: Large Outflows Detected at ETF
Fri, Jul 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLF, AXP, USB, COF Exchange traded funds (ETFs) trade just ...

First Trust S&P REIT Index Fund Experiences Big Outflow
Fri, Jul 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: FRI, HCN, VTR, VNO Exchange traded funds (ETFs) trade just ...

11.0% of VDC Holdings Seeing Recent Insider Buys
Fri, Jul 25, 10:14 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard Consumer Staples ETF (VDC) shows ...

13.5% of VNQ Holdings Seeing Recent Insider Buys
Fri, Jul 25, 10:14 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard REIT ETF (VNQ) shows an ...

ETN Named A Top Socially Responsible Dividend Stock
Fri, Jul 25, 9:34 AM ET, by ETF Channel

Eaton Corp plc (ETN) has been named a Top Socially Responsible Dividend Stock by Dividend ...

U.S. Bancorp a Top 25 Dividend Giant With 2.30% Yield (USB)
Fri, Jul 25, 9:34 AM ET, by ETF Channel

U.S. Bancorp (USB) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

PBCT Named Top 25 SAFE Dividend Stock Increasing Payments For Decades
Fri, Jul 25, 9:34 AM ET, by ETF Channel

People's United Financial, Inc. (PBCT) has been named to the Dividend Channel ''S.A.F.E. ...

SPDR S&P Mortgage Finance Breaks Below 200-Day Moving Average - Notable for KME
Thu, Jul 24, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the SPDR S&P Mortgage Finance ETF (KME) crossed below ...

SLV Makes Notable Cross Below Critical Moving Average
Thu, Jul 24, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the iShares Silver Trust ETF (SLV) crossed below their ...

Simon Property Group Moves Up In Analyst Rankings, Passing Precision Castparts
Thu, Jul 24, 12:14 PM ET, by ETF Channel

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

DGL Crosses Below Key Moving Average Level
Thu, Jul 24, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the PowerShares DB Gold Fund ETF (DGL) crossed below ...

Uranium (URA) Shares Cross Below 200 DMA
Thu, Jul 24, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the Uranium ETF (URA) crossed below their 200 day ...

IYM, DOW, IP, MON: Large Inflows Detected at ETF
Thu, Jul 24, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IYM, DOW, IP, MON Exchange traded funds (ETFs) trade just ...

QQQ, INTC, GOOGL, FB: Large Outflows Detected at ETF
Thu, Jul 24, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: QQQ, INTC, GOOGL, FB Exchange traded funds (ETFs) trade just ...

Strong Insider Buying Reported in TZE Holdings
Thu, Jul 24, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the iShares Target Date 2015 ETF (TZE) ...

14.3% of VIS Holdings Seeing Recent Insider Buys
Thu, Jul 24, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard Industrials ETF (VIS) shows an ...

HCP a Top 25 Dividend Giant With $3.03B Held By ETFs
Thu, Jul 24, 8:14 AM ET, by ETF Channel

HCP, Inc. (HCP) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

Why Cisco Systems is a Top Socially Responsible Dividend Stock (CSCO)
Thu, Jul 24, 8:14 AM ET, by ETF Channel

Cisco Systems, Inc. (CSCO) has been named a Top Socially Responsible Dividend Stock by Dividend ...

Shares of TECS Now Oversold
Wed, Jul 23, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the Daily Technology Bear 3x Shares ETF (TECS) entered ...

Edison International Takes Over #18 Spot From Delta Air Lines
Wed, Jul 23, 12:14 PM ET, by ETF Channel

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

PowerShares DWA Developed Markets Momentum Portfolio (PIZ) Shares Cross Above 200 DMA
Wed, Jul 23, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares DWA Developed Markets Momentum Portfolio ETF (PIZ) ...

IWD, C, AIG, F: Large Outflows Detected at ETF
Wed, Jul 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IWD, C, AIG, F Exchange traded funds (ETFs) trade just ...

IEMG, BAP, MBT, SCCO: Large Inflows Detected at ETF
Wed, Jul 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IEMG, BAP, MBT, SCCO Exchange traded funds (ETFs) trade just ...

BSCF, BAC, AZN, D: ETF Inflow Alert
Wed, Jul 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: BSCF, BAC, AZN, D Exchange traded funds (ETFs) trade just ...

HDV, CVX, PM, KO: ETF Inflow Alert
Wed, Jul 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: HDV, CVX, PM, KO Exchange traded funds (ETFs) trade just ...

CDI a Top 25 Dividend Giant With 3.55% Yield (CDI)
Wed, Jul 23, 9:24 AM ET, by ETF Channel

CDI Corp. (CDI) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

Why NextEra Energy is a Top Socially Responsible Dividend Stock (NEE)
Wed, Jul 23, 9:24 AM ET, by ETF Channel

NextEra Energy Inc (NEE) has been named a Top Socially Responsible Dividend Stock by Dividend ...

Danaher Moves Up In Analyst Rankings, Passing Anadarko Petroleum
Tue, Jul 22, 1:14 PM ET, by ETF Channel

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

RWM: ETF Inflow Alert
Tue, Jul 22, 11:34 AM ET, by ETF Channel

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

SPDR Dow Jones International Real Estate ETF Experiences Big Inflow
Tue, Jul 22, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: RWX, BAM.A.CA, REI.UN.CA, HR.UN.CA Exchange traded funds (ETFs) trade just ...

FXZ, TMST, RYAM, FCX: ETF Inflow Alert
Tue, Jul 22, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: FXZ, TMST, RYAM, FCX Exchange traded funds (ETFs) trade just ...

VB, SLXP, FL, AJG: ETF Inflow Alert
Tue, Jul 22, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: VB, SLXP, FL, AJG Exchange traded funds (ETFs) trade just ...

SPXU: ETF Inflow Alert
Tue, Jul 22, 11:34 AM ET, by ETF Channel

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

EFA, AI, CS, AIR: Large Inflows Detected at ETF
Tue, Jul 22, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: EFA, AI, CS, AIR Exchange traded funds (ETFs) trade just ...

18.0% of FDM Holdings Seeing Recent Insider Buys
Tue, Jul 22, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the First Trust Dow Jones Select MicroCap ...

CAT a Top 25 Dividend Giant With $3.51B Held By ETFs
Tue, Jul 22, 8:14 AM ET, by ETF Channel

Caterpillar Inc. (CAT) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

PepsiCo Inc. a Top Socially Responsible Dividend Stock With 2.9% Yield (PEP)
Tue, Jul 22, 8:14 AM ET, by ETF Channel

PepsiCo Inc. (PEP) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

Notable Two Hundred Day Moving Average Cross - IEV
Mon, Jul 21, 5:24 PM ET, by ETF Channel

In trading on Monday, shares of the iShares Europe ETF (IEV) crossed below their 200 ...

Google Takes Over #14 Spot From Facebook
Mon, Jul 21, 12:14 PM ET, by ETF Channel

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

See How Pfizer Ranks Among Analysts' Top Dow 30 Picks
Mon, Jul 21, 12:14 PM ET, by ETF Channel

A study of analyst recommendations at the major brokerages shows that Pfizer Inc (PFE) is ...

iShares MSCI Germany Small-Cap Getting Very Oversold
Mon, Jul 21, 11:34 AM ET, by ETF Channel

In trading on Monday, shares of the iShares MSCI Germany Small-Cap ETF (EWGS) entered into ...

WisdomTree Barclays U.S. Aggregate Bond Negative Duration Fund (AGND) Enters Oversold Territory
Mon, Jul 21, 11:34 AM ET, by ETF Channel

In trading on Monday, shares of the WisdomTree Barclays U.S. Aggregate Bond Negative Duration Fund ...

Shares of HYLS Now Oversold
Mon, Jul 21, 11:34 AM ET, by ETF Channel

In trading on Monday, shares of the First Trust Tactical High Yield ETF (HYLS) entered ...

JDST Crowded With Sellers
Mon, Jul 21, 11:34 AM ET, by ETF Channel

In trading on Monday, shares of the Daily Junior Gold Miners Index Bear 3x Shares ...

RSP, VRTX, WMB, COV: Large Inflows Detected at ETF
Mon, Jul 21, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: RSP, VRTX, WMB, COV Exchange traded funds (ETFs) trade just ...

12.7% of VBR Holdings Seeing Recent Insider Buys
Mon, Jul 21, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard Small-Cap Value ETF (VBR) shows ...

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.