World Cup ETF Prize Goes To Argentina

July 09, 2014

If ETF returns are any guide to the outcome of soccer’s World Cup, Argentina is heading for the winner’s circle.

The World Cup is coming to an end, and the final contenders for the ultimate crown of glory of best soccer team in the world face off this week. If equity ETF performance were any indication of soccer prowess, Argentina could emerge as world champion this year.

From a soccer perspective, Argentina is heading into the finals as the team with the lowest overall scoring totals of the group. After its historic 7-1 semifinal victory over Brazil, Germany now leads this Cup with 17 goals scored so far. The Netherlands, which faces Argentina in a semifinal today has 12 goals scored so far; Brazil has 11, according to FIFA, soccer’s governing body that organizes the World Cup.

But consider that the Global X FTSE Argentina 20 ETF (ARGT | D-24)—the only Argentina equity ETF on the market today—has now rallied nearly 15 percent since the beginning of the year, far outpacing the performance of the other three countries competing for the ultimate soccer prize.

The $12 million fund tracks an index of 20 Argentine-linked ADRs listed in the U.S., and offers broad exposure to the country’s biggest names.

By comparison, the iShares MSCI Netherlands ETF (EWN | B-98), also a one-of-a-kind ETF, is down nearly 0.5 percent this year. The $224 million fund tracks a market-cap-weighted index of Dutch firms.

If our ETF-to-soccer performance correlation theory held any water, Brazil would have come in as the World Cup’s silver medalist. Measured by the performance of the $4.7 billion iShares MSCI Brazil Capped ETF (EWZ | C-97), the fund is up nearly 10 percent year-to-date. But the best it can do now is third place.

Germany, meanwhile, known for its consistency and dependability as a team, would have gone home empty handed in fourth place. The $5.5 billion iShares MSCI Germany ETF (EWG | A-97) is the group’s worst-performing fund, with losses of 0.55 percent since the beginning of the year. But, after crushing Brazil, it will finish the tournament no lower than No. 2.

The title match, pitting Germany against the winner of today's Argentina-Holland match, takes place on Sunday, July 13 in Rio de Janeiro.

World_Cup_ETFs_YTD_Performance

Chart courtesy of StockCharts.com

 

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