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As the second-quarter draws to a close, Wall Street and global markets, must be interested in knowing which investing areas won in the second quarter. The quarter was upbeat for the stock market, having gained positive momentum from an agreement on the U.S. debt ceiling, encouraging Q1 results, easing inflation and an AI frenzy.
The S&P 500 has gained about 6.5% so far in the second quarter (as of Jun 28, 2023). Notably, Information Technology takes about 27% of the S&P 500. Hence, a tech rally is always instrumental in driving the broader markets. Meanwhile, Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) is up 1.3% in Q2 on a less-hawkish Fed stance and comments. Such subdued strength of the U.S. dollar benefited some emerging market equities a lot in the second quarter.
Against this backdrop, below we highlight a few top-performing country ETFs of the second-quarter. Average three-month returns (per etfdb.com) of the country ETFs are given below:
Brazil – Up 34.17%
VanEck Brazil Small-Cap ETF (BRF - Free Report) – Up 42.9%
iShares MSCI Brazil Small-Cap ETF (EWZS - Free Report) – Up 37.1%
Investors have launched themselves into Brazil’s stock market as the nation’s central bank is likely to ease stubbornly high rates amid falling inflation. Finance Minister Fernando Haddad stated that Brazil is about to enter a cycle of interest rate cuts, highlighting that inflation is within the range and the exchange rate is stable. Fidelity Investments and some local hedge funds placed their bet on Brazil, as they believed that the likely decline in borrowing costs would boost corporate growth — just as President Luiz Inacio Lula da Silva’s new fiscal framework moves toward materialization.
Though Poland’s gross domestic product shrank in the first quarter of 2023, marking the first economic downturn since the Q4 of 2020, investors remained hopeful on the country’s equity market potential. The National Bank of Poland held its benchmark reference rate at 6.75% for the ninth successive meeting in June 2023, in line with forecasts. Holding rates for such a long time (while most economies have been raising the same) was a welcoming move for the Polish stock market.
Nigeria – Up 30.1%
Global X MSCI Nigeria ETF – Up 28.5%
Nigeria stocks soared to a 15-year high due to the oust of central bank governor Godwin Emefiele. Investors betting on a currency devaluation sent the main index of the Nigerian Exchange soaring, per Bloomberg.
Election bet has been boosting the Argentina’s market. Investors are positioning themselves in Argentine stocks ahead of the nation’s political cycle, said Francisco Choe, portfolio manager at Galicia Asset Management in Buenos Aires, as quoted on Financial Post. Polls revealed that there is lesser chance of winning for the left-oriented ruling coalition while market-friendly candidate has higher chances of winning the election.
Greece stocks have rebounded in recent months due to fiscal and bureaucratic reforms, upbeat economic data points. Greek economic growth was 5.9% in 2022, way higher than the 3.5% rate in the Euro zone. The Greek central bank’s expects the economy to grow 2.2% in 2023, according to Reuters. This has brightened investor perceptions about Greece. Its central bank eyes an upgrade from junk to investment grade.
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5 Country ETFs Beating the S&P 500 in Q2
As the second-quarter draws to a close, Wall Street and global markets, must be interested in knowing which investing areas won in the second quarter. The quarter was upbeat for the stock market, having gained positive momentum from an agreement on the U.S. debt ceiling, encouraging Q1 results, easing inflation and an AI frenzy.
The S&P 500 has gained about 6.5% so far in the second quarter (as of Jun 28, 2023). Notably, Information Technology takes about 27% of the S&P 500. Hence, a tech rally is always instrumental in driving the broader markets. Meanwhile, Invesco DB US Dollar Index Bullish Fund (UUP - Free Report) is up 1.3% in Q2 on a less-hawkish Fed stance and comments. Such subdued strength of the U.S. dollar benefited some emerging market equities a lot in the second quarter.
Against this backdrop, below we highlight a few top-performing country ETFs of the second-quarter. Average three-month returns (per etfdb.com) of the country ETFs are given below:
Brazil – Up 34.17%
VanEck Brazil Small-Cap ETF (BRF - Free Report) – Up 42.9%
iShares MSCI Brazil Small-Cap ETF (EWZS - Free Report) – Up 37.1%
Franklin FTSE Brazil ETF (FLBR - Free Report) – Up 31.1%
iShares MSCI Brazil ETF (EWZ - Free Report) – Up 30.1%
Investors have launched themselves into Brazil’s stock market as the nation’s central bank is likely to ease stubbornly high rates amid falling inflation. Finance Minister Fernando Haddad stated that Brazil is about to enter a cycle of interest rate cuts, highlighting that inflation is within the range and the exchange rate is stable. Fidelity Investments and some local hedge funds placed their bet on Brazil, as they believed that the likely decline in borrowing costs would boost corporate growth — just as President Luiz Inacio Lula da Silva’s new fiscal framework moves toward materialization.
Poland – Up 31.26%
iShares MSCI Poland ETF (EPOL - Free Report) – Up 29.2%
Though Poland’s gross domestic product shrank in the first quarter of 2023, marking the first economic downturn since the Q4 of 2020, investors remained hopeful on the country’s equity market potential. The National Bank of Poland held its benchmark reference rate at 6.75% for the ninth successive meeting in June 2023, in line with forecasts. Holding rates for such a long time (while most economies have been raising the same) was a welcoming move for the Polish stock market.
Nigeria – Up 30.1%
Global X MSCI Nigeria ETF – Up 28.5%
Nigeria stocks soared to a 15-year high due to the oust of central bank governor Godwin Emefiele. Investors betting on a currency devaluation sent the main index of the Nigerian Exchange soaring, per Bloomberg.
Argentina – Up 25.9%
Global X MSCI Argentina ETF (ARGT - Free Report) – Up 21.3%
Election bet has been boosting the Argentina’s market. Investors are positioning themselves in Argentine stocks ahead of the nation’s political cycle, said Francisco Choe, portfolio manager at Galicia Asset Management in Buenos Aires, as quoted on Financial Post. Polls revealed that there is lesser chance of winning for the left-oriented ruling coalition while market-friendly candidate has higher chances of winning the election.
Greece – Up 21.8%
Global X MSCI Greece ETF (GREK - Free Report) – Up 20.9%
Greece stocks have rebounded in recent months due to fiscal and bureaucratic reforms, upbeat economic data points. Greek economic growth was 5.9% in 2022, way higher than the 3.5% rate in the Euro zone. The Greek central bank’s expects the economy to grow 2.2% in 2023, according to Reuters. This has brightened investor perceptions about Greece. Its central bank eyes an upgrade from junk to investment grade.