Ahead of this weekend’s presidential elections, an exchange-traded fund that monitors Argentine markets suffered its largest withdrawal in over two years. Last week, traders withdrew US$6.6 million in a single day from the Global X MSCI Argentina ETF, the largest amount since April 2021. One of the primary assets for investors looking to invest in …
Ahead of this weekend’s presidential elections, an exchange-traded fund that monitors Argentine markets suffered its largest withdrawal in over two years. Last week, traders withdrew US$6.6 million in a single day from the Global X MSCI Argentina ETF, the largest amount since April 2021. One of the primary assets for investors looking to invest in Argentina, where capital regulations make it difficult to access local markets, is the US$55 million ETF. Investor unease is evident in this move ahead of Sunday’s vote, which will match pro-business candidate Patricia Bullrich and Economy Minister Sergio Massa against libertarian front-runner Javier Milei. The future president of the nation will have to rein in triple-digit inflation and replenish reserves at a central bank barren of dollars. To regain investor confidence in the heavily indebted country, the incoming administration—whether it be Milei, Bullrich, or Massa—will also need to drastically reduce the fiscal deficit and do away with a complex system of capital controls. Everything points to economic instability. Malcolm Dorson, head of emerging-market strategy at Global X, said, “It makes sense that some investors have taken profits” in light of the election, the Israel-Hamas conflict, the war in Ukraine, and the uncertainty surrounding the Federal Reserve’s next moves. Under the ticker ARGT, the Argentine ETF has gained over 40% in US dollars during the last 12 months. Many investors are keeping a careful eye on the situation despite the recent setback, according to Dorson, “as the election is pointing towards political and economic change.” “Any sell-off could be viewed as a desirable opportunity to enter the market.”
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