The iShares MSCI Brazil ETF has experienced significant fluctuations in value, particularly after the recent presidential election, where the fund surged 13% following right-wing candidate Flávio Bolsonaro's initial voting success but then plummeted nearly 20% after incumbent Luiz Inácio Lula da Silva won the runoff.
This volatility was largely attributed to crowded positioning, with investors pouring approximately $4 billion into the ETF in anticipation of a Bolsonaro victory. However, Link argues that the market's reaction overlooks Brazil's robust economic fundamentals, including low unemployment rates and a projected 2.2% GDP growth by 2026.
Brazil's young population and substantial foreign investment, which totaled around $88 billion over the past year, further support long-term growth. Link highlights opportunities in agriculture, fintech, and renewable energy as key sectors for expansion.
With EWZ's price dropping from over $42 to around $32, she views this as a favorable entry point, emphasizing that the recent downturn reflects a shift in investor sentiment rather than a decline in Brazil's economic health. Despite potential ongoing volatility due to political and market factors, Link remains confident in the long-term prospects of the Brazilian economy and her investment in EWZ