Today, after 25 years of negotiations, the EU signed the free trade agreement with the Mercosur countries of South America: Brazil, Argentina, Uruguay and Paraguay. With 700 million inhabitants, this will be the largest free trade zone in the world.
A great success for the rules-based world order as a counterpoint to the strengthening autocracies!
Before we get sentimental, here is a suggestion for those who also want to profit from the economic benefits:
There is no special Mercosur ETF. So you have to tinker. Since almost 70-80% of Mercosur's GDP is generated in Brazil, you can cover this part with the MSCI Brazil $EWZ (+2,09%) cover this part.
The remaining countries are not yet emerging markets, but frontier markets. They can be covered with $DX2Z (+0,28%) can be mapped. Argentina and Uruguay are relatively highly weighted with a total of 25%.
So if you want to benefit from the agreement, you could build up a medium-term Mercosur position with 80% MSCI Brazil and 20% frontier markets.
I myself am sticking to my strategies, but there are some tactical ETF investors among you. The combination could be interesting for them.
Good luck!
Your Epi
https://www.n-tv.de/wirtschaft/Weg-fuer-Mercosur-Handelsabkommen-ist-frei-id30221473.html
