Presidential candidate of the Liberty Advances coalition Javier Milei speaks after his victory over Sergio Massa, Economy Minister and candidate of the ruling Peronist, party in a presidential runoff election in Buenos Aires, Argentina, Sunday, Nov. 19.Natacha Pisarenko/The Associated Press
An exchange-traded fund (ETF) focused on Argentina’s stock market surged on Monday after the electoral victory of Argentina’s Javier Milei, a radical libertarian who promised voters economic shock therapy.
The Global X MSCI Argentina ETF (ARGT-A), which offers exposure to a basket of the country’s most liquid stocks, soared more than 13 per cent on Monday and hit its highest level since September.
While the South American country’s markets are closed on Monday for a local holiday, U.S.-listed shares of Argentinian companies also surged in U.S. trading.
The gains for the ETF came through large amounts of small trades, Todd Sohn, an ETF analyst at Strategas in New York, said.
Argentina investors on edge as president-elect Javier Milei decides who to put in economic hot seat
By mid-morning, the value of trading in the ETF had topped US$11-million, compared with average of about US$1-million a day throughout 2023. Most of those trades came in blocks of 100 shares or even fewer, Mr. Sohn said.
“There seems to be a lot of random trading by retail investors playing the volatility” following the election news and amid speculation about Mr. Milei’s proposals to tackle Argentina’s economic woes, Mr. Sohn added.
Some of the largest investors of record in ARGT as of Sept. 30 include hedge fund Millennium Management LLC, which could not immediately be reached for comment.
The roster of large shareholders also includes ETF marketmakers and wealth management and advisory firms catering to high-net worth individuals and families.
ARGT, one of a number of small country-specific ETFs, currently has only about US$56-million in assets. By far its largest holding is MercadoLibre Inc., which accounts for 28 per cent of the fund.
Other Argentina stocks that saw their U.S. listed shares rally were oil company YPF, up 39.7 per cent, and financials Banco Macro and Grupo Financiero Galicia.
“These small country funds are ideal vehicles for small day traders who jump on events” like Sunday’s presidential election in Argentina, Mr. Sohn said.
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