Argentina ETF Tumbles On Default [Global X Funds]

The fund slightly recovered at the close shedding 4.09% on elevated volume of more than 12 times a normal day (see: all the Latin American ETFs here).

ARGT in Focus

The ETF provides exposure to 21 largest and liquid Argentine-linked ADRs (American depository receipts) listed in the U.S. by tracking the FTSE Argentina 20 Index. The fund has amassed $33.6 million in its asset base and charges 75 bps in fees and expenses.

With respect to individual holdings, the product is highly concentrated on the top firm – Tenaris (TS) – at 17.8% while YPF SA (YPF) and Mercadolibre (MELI) round off the next two spots with double-digit allocation. The three firms lost 4.1%, 9.1% and 1.7%, respectively.

Other firms such as Pampa Energia , Telecom Argentina (TEO), BBVA Banco Frances (BFR) and Grupo Financiero Galicia (GGAL), accounting for a sizable exposure in the fund’s portfolio also contributed to the decline. These stocks are down 8.8%, 8.3%, 7.4% and 5%, respectively, and account for a combined 17.6%.

The ETF is skewed toward small securities as these account for 58% of total assets, while large and mid caps take the rest with 27% and 16%, respectively. From a sectors look, energy takes the biggest chunk, followed by materials, financials and technology. The fund currently has a Zacks ETF Rank of 4 or ‘Sell’ with High risk outlook, suggesting continued underperformance in the coming months.

This article is brought to you courtesy of Sweta Killa from Zacks.

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