ARGT, Argentina ETF, Soars on Election of Libertarian
The Global X MSCI Argentina ETF (ARGT) rose more than 12% today after the election of libertarian president Javier Milei, a former economist with a raft of radical policy proposals aimed at ending the nation’s inflation woes and general economic crisis.
The $53.2 million Global X fund rose $5 to $47.11 in afternoon trading. It’s gained 30% over the past year, according to etf.com data.
Milei beat his opponent Sergio Massa, the economic minister of the current government. His election comes as Argentina is in the throes of an economic crisis, with approximately 40% of its citizens living in poverty, annual inflation topping 100% and $44 billion in debt to the International Monetary Fund.
Milei has proposed numerous radical policies he claims will pull the country out of economic crisis. He wants to close the Argentine central bank and toss the Argentine peso, suggesting the country instead adopt the U.S. dollar as its currency. Among his other policies are plans to slash government spending; cut ties with two of Argentina’s biggest trading partners, China and Brazil and legalize the sale of human organs.
ARGT Surges on Hopes for Easing Economic Woes
The $53 million fund has taken in nearly $20 million in inflows this year. The fund has been buoyed by strong performance this year, having returned 19.4% year to date and 30% in the past 12 months.
For reference, the benchmark SPDR S&P 500 ETF Trust (SPY) gained 16% and 12% over those time periods, respectively. The fund has benefitted from investors in Argentina piling into the stock market as a hedge against the country’s surging inflation. According to Reuters the fund has seen many small-scale trades today, as the fund draws interest from retail investors.
The execution of Milei’s policies may prove difficult, as his political coalition, Liberty Advances, only has 38 out of 257 seats in the Argentine lower legislative house, and seven of 72 in its upper house, according to the Economist.
Contact Gabe Alpert at gabriel.alpert@etf.com
