3 Stocks That Help Drive Brazilian Equity's Outperformance Over US Equity In 2023
Portfolio Pulse from Surbhi Jain
Brazilian equities, particularly the iShares MSCI Brazil ETF (EWZ), outperformed U.S. equities in 2023, with EWZ returning 32.27% compared to the SPDR S&P 500 ETF's (SPY) 23.22%. Stocks like Petroleo Brasileiro SA Petrobras (PBR), Itau Unibanco Holding SA ADR (ITUB), and Banco do Brasil SA BB Brasil (BDORY) have significantly contributed to this outperformance, with year-to-date gains of 59%, 53%, and over 75% respectively.
December 13, 2023 | 5:53 pm
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NEGATIVE IMPACT
The SPDR S&P 500 ETF (SPY) is up 23.22% for the year, trailing behind the performance of the EWZ ETF.
While SPY has had a strong year, its underperformance relative to EWZ could lead to a short-term negative impact as investors may seek higher returns elsewhere.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
Banco do Brasil SA BB Brasil (BDORY) stock is up over 75% YTD, with a 2.61% weight in EWZ's portfolio, despite some concerns over delinquency rates.
BDORY's exceptional YTD performance is a strong contributor to EWZ's outperformance, although concerns over delinquency rates may temper investor enthusiasm.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 70
POSITIVE IMPACT
The iShares MSCI Brazil ETF (EWZ) has outperformed the S&P 500, returning 32.27% compared to SPY's 23.22% in 2023.
The significant outperformance of EWZ compared to SPY is likely to attract investor attention and could lead to increased investment inflows in the short term.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Itau Unibanco Holding SA ADR (ITUB) is up about 53% YTD, with a 7.82% weight in EWZ's portfolio and a strong financial performance.
ITUB's significant contribution to EWZ's portfolio and its exceptional YTD performance indicate a positive short-term impact on its stock price.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 80
POSITIVE IMPACT
Petroleo Brasileiro SA Petrobras (PBR) stock is up 59% YTD, contributing significantly to EWZ's performance with plans for production growth and strong returns.
PBR's substantial weight in the EWZ portfolio and its impressive YTD performance, along with future growth plans, suggest a positive short-term outlook.
CONFIDENCE 85
IMPORTANCE 85
RELEVANCE 90