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Brazil’s economy is the world’s eighth largest, and the largest in South America. Brazil is also the world’s ninth-largest oil exporter. Brazil’s economy stalled during the financial crisis, as global demand for the country’s commodity-based exports, including oil, slowed. However, it was one of the first emerging markets to begin a recovery, posting positive growth in the second quarter of 2009. The Brazilian economy could grow as much as 5.5% in 2010. To top it off, the country’s exports to fast-growing China have risen sharply. In 2009, China passed the U.S. to become Brazil’s biggest export market, accounting for 12.5% of its total 2009 exports. The U.S. accounted for 10.5%, followed by Argentina (8.4%), the Netherlands (5.4%) and Germany (4.1%)....
ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $40.30 (New York Exchange symbol FXI; buy or sell through brokers) is an ETF that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest and most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on the New York exchange. The fund’s top holdings are China Mobile, 10.1%; China Construction Bank, 9.1%; Industrial & Commercial Bank, 7.9%; China Life, 6.3%; Bank of China, 5.8%; Ping An Insurance, 4.6%; China Unicom Hong Kong, 4.3%; CNOOC, 4.3%; China Telecom, 4.2%; and China Merchants Bank, 4.1%. The fund’s holdings give it the following industry breakdown: Financials, 47.1%; Telecommunications, 18.6%; Oil and Gas, 12.3%; Basic Materials, 11.0%; Industrials, 8.0%; Consumer Services, 2.1%; and Utilities, 0.8%. The ETF has an expense ratio of 0.73%. The dividend yield is 2.3%....
ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $26.34 (New York Exchange symbol ESR; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Eastern Europe Index. The fund’s geographic breakdown is as follows: Russia, 73.7%; Poland, 14.2%; Czech Republic 5.7%; and Hungary, 4.9%. iShares MSCI Emerging Markets Eastern Europe Index Fund’s top holdings are Gazprom (Russia: gas utility), 19.9%; Lukoil (Russia: oil), 9.8%; Sberbank (Russia: bank), 8.8%; MMC Norilsk Nickel (Russia: mining), 4.7%; Mobile TeleSystems (Russia: wireless), 4.4%; Rosneft Oil (Russia: oil), 3.7%; Surgutneftegas (Russia: oil and gas), 3.2%; CEZ AS (Poland: utility), 2.9%; PKO Bank Polski SA (Poland: bank), 3.0%; and Tatnef (Russia: oil), 2.9%....
ISHARES MSCI BRAZIL INDEX FUND $70.55 (New York Exchange symbol EWZ; buy or sell through brokers), is an exchange-traded fund that is designed to track the Brazilian stock market. The fund’s top holdings are Petrobras preferred shares (energy), 9.4%; Cia Vale do Rio Doce (mining) preferred shares, 9.3%; Itau Unibanco Multiplo SA (banking), 9.0%; Petrobras common shares, 7.9%; Cia Vale do Rio Doce common shares, 6.8%; Banco Bradesco preferred shares (banking), 5.2%; Itausa-Investimentos Itau (conglomerate), 3.4%; Cia de Bebidas das Americas preferred shares (beer and other beverages), 3.1%; BM&F Bovespa SA (Brazilian stock exchange), 2.7%; and OGX Petroleo e Gas Patricipa (energy), 2.6%. The ETF’s industry breakdown is as follows: Materials, 26.2%; Financials, 25.1%; Energy, 20.6%; Consumer Staples, 8.8%; Utilities, 5.6%; Consumer Discretionary, 5.3%; Industrials, 3.3%; Telecommunication Services, 2.8%; and Information Technology, 2.0%. The fund has an expense ratio of 0.65%....
ISHARES S&P INDIA NIFTY 50 INDEX FUND $27.04 (Nasdaq symbol INDY; buy or sell through brokers), is an ETF that aims to track the S&P CNX Nifty Index, which represents the 50 largest, most liquid Indian securities on the National Stock Exchange of India. The fund’s top holdings are Reliance Industries (conglomerate), 10.2%; Infosys Technologies (software), 8.3%; ICICI Bank, 6.9%; Larsen & Toubro Ltd. (conglomerate), 6.2%; ITC Ltd. (conglomerate), 5.4%; Housing Development Finance, 5.2%; HDFC Bank, 4.8%; State Bank of India, 4.7%; Oil and Natural Gas Corp., 2.8%; and Tata Consulting Services (information technology), 2.8%. The fund’s industry breakdown includes: Banks, 19.6%; Computers: Software, 13.0%; Refineries, 10.9%; Cigarettes, 5.4%; Finance: Housing, 5.2%; Automobiles, 4.7%; Power, 4.6%; Steel and Steel Products, 4.4%; Oil Exploration and Production, 3.8%; and Electrical Equipment, 3.7%....
Australia weathered the financial crisis without going into recession — unlike almost all other major global economies. Stimulus spending helped, but it also benefited from strong demand for its exports from China. As well, like Canada, Australia has a strong banking sector that didn’t need government bailouts. Australia’s recent election has resulted in a minority government. That should benefit the Australian economy, because it will stop all parties from pursuing their dumbest or most extreme ideas. It pays to remember that our minority government has put Conservatives and Liberals in a similar balancing act. That helps explain why Canada has done better economically than the U.S., and continues to do so....
Gold and silver continue to rise. Gold is up 30% from a year ago, and is trading at $1,248 U.S. an ounce. Silver is at $19.35 U.S. an ounce, up 38%. Gold and silver could well move higher over the longer term, although they will likely remain volatile. Higher prices would arise from investor fears that low interest rates and governments injecting money into their economies will spur inflation or weaken their currencies. If you want to hold a number of gold or silver stocks, these two exchange-traded funds offer top-quality global miners and low fees....
Exports to the U.S., Europe and other developed nations are a significant source of growth for emerging economies. However, expanding domestic demand is increasingly supporting those economies. That’s helping offset slower growth internationally. And with savings rates as high as 53% of GNP in China, 33% in India and 16% in Brazil, compared to just 12% in the U.S., there’s lots of room for domestic consumption to grow in many emerging countries. One of the best ways to invest in emerging markets is through exchange-traded funds (ETFs). You’ll need to be selective, but ETFs make it easy to invest internationally. As well, the best ETFs offer a great combination of low fees and top-quality stocks. Here are four emerging market ETFs we like:...
ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $24.22 (Toronto symbol XGD; buy or sell through brokers) aims to mirror the performance of the S&P/TSX Global Gold Index. This index is made up of gold stocks from Canada and around the world. The weight of any one company is capped at 25% of the index’s market capitalization. The fund’s MER is 0.55%. iShares S&P/TSX Global Gold Index Fund began trading on March 23, 2001. The fund’s top-ten holdings are Barrick Gold at 18.6%; Goldcorp., 13.1%; Newmont Mining, 11.9%; AngloGold Ashanti (ADR), 6.2%; Kinross, 4.7%; Eldorado Gold, 4.2%; Agnico-Eagle, 4.2%; Gold Fields (ADR), 4.1%; Randgold Resources (ADR), 3.3%; and Yamana Gold, 3.1%....
Members of Pat McKeough’s Inner Circle sometimes ask us how to find good investments for young children. If children are under the age of 18, they cannot yet invest as adults. However, there are a couple of savings and investment options available:
- You (or the child) can open a bank account in the child’s name: Interest paid on small balances may range from zero to, say, 0.50% annually, paid monthly. All of the major banks have special bank accounts for children, usually without service fees on basic transactions. However, once the child has accumulated $500, he or she could move the money into an interest-paying guaranteed investment certificate (GIC).
- Informal in-trust account: If you want to build up an investment portfolio for a child, then an informal in-trust account is a low-cost and flexible option. (Investments or investment accounts in the name of a child must be set up in trust because minors are not allowed to enter into binding financial contracts.) An adult must be responsible for providing the investment instructions and signing the contract on the child’s behalf. An informal in-trust account has a donor (or “settlor”) who contributes funds to the trust. The trustee is the person in charge of the account, and is responsible for managing the funds for the child (the “beneficiary”). The settlor should not act as the trustee. The settlor’s spouse can be a trustee, however. The money belongs to the child, but only the trustee can make withdrawals if the child is under the age of 18. Once the child reaches 18, the money is theirs to do with as they wish.