Rebounding Argentina ETF Faces Hurdles

November 23, 2015

Argentina elected a new president this weekend, bringing to an end the latest round of Peronist rule that left the country faced with slow growth, high inflation, depleted foreign reserves and isolation from global capital markets after defaulting on debt obligations.

Under the leadership of outgoing President Cristina Fernandez de Kirchner, Argentina became known for its stringent capital controls imposed on international investors, and a perceived lack of an independent regulatory authority to protect the rights of shareholders.

From Emerging To Frontier

In fact, back in 2010, the country was demoted to frontier from emerging market status by FTSE. Since then, the only U.S.-listed Argentina equity ETF, the Global X FTSE Argentina 20 ETF (ARGT), has struggled to return to levels not seen in more than five years, as the chart below shows:

But the latest presidential election that brought conservative Mauricio Macri to power under the promise of liberalizing the economy seems to have offered support to the ETF. In the past month coming into this weekend’s vote, the fund rallied more than 11%, bringing year-to-date gains to 4%.

Find your next ETF

Reset All