As the Chile’s stock market has been a leader during the global recovery period, there has been some great interest in Chile ETF products worldwide. Chile ETFs and exchange traded funds with exposure to the Latin America in general do offer global investors the opportunity of gains that exceed those of Europe and US. Chile is politically stable, rich in resources and fiscally conservative. The country is also known as the most export oriented country in the world. The top Chile ETF performers in the Latin American ETF market include the iShares MSCI Chile Investable Market Index Fund (ECH) and the Global X FTSE Andean 40 (AND).
iShares MSCI Chile Investable Market Index Fund (ECH)
The ECH is enjoying some of the best returns amongst all international ETFs, and among Chile ETFs. Chile has been stricken by global depression and adding much to worst the country was even struck by a large earthquake. It destroyed 3% of Chile’s capital stock which accumulated to $15-30 billion in cost. This shook much of Chile’s contribution to the Latin American Stock market.
Despite this obstacle ECH has gone up by 18.7% since last year with a total asset of about $800 million. A main factor working for the country is the rebound in copper which is at the core of the economy. The raise in the interest rate also pushed the Chilean peso against the US dollar which gave further momentum to ECH. Many of the international ETFs are structured in this way that an increase in the local currency against the dollar increases the fund by the same percentage.
Global X FTSE Andean 40 (AND)
This Chile ETF is tracking the performance of 40 largest companies in Chile, Colombia and Peru. Global X FTSE Andean 40 (AND) has a 49% weighing in Chilean stock. The Andean region is one of the best performing stock markets. This Chile ETF was launched to take advantage of the pending agreement which describes the merging of the three country’s stock markets. This is to create the second largest stock exchange of Latin America. AND has an expense ratio of 0.72% and some of the weightings are entailing to 28.4% materials, 21.3% financials, 14.7% oil & gas, 12.9% consumer services, 2.1% consumer goods, 1.0% telecommunication and 6.3% utilities. Read more here
The First Trust ISR Global Copper (NASDAQ:CU)
The First Trust ISR Global Copper (NASDAQ:CU) is another important Chile ETF in the Latin American ETF region. It is not a holding of Chile but many of the mining companies in this fund have properties in Chile. This is similar to the Global X Copper Miners (NYSEArca:COPX) which has miners properties in Chile.
Investing options in Chile needs to consider the facts of ups and downs of the Chilean economy. In 2010 the trade surplus of the country was healthy. The export markets continue to grow and the economy is growing at a rate of 5% since last year. Sound economic policies and a well functioning democracy add to the economic future of Chile. Moreover, the country is also rich in natural resources like timber, precious metals, iron ore and hydropower.
After the devastating earthquake last year the reconstruction efforts by the government were massive and significant progress has been made towards rebuilding the infrastructure of Chile. The Chile ETF ECH did fall after the earthquake but it is performing much better than expectations. The AND ETF is an addition to the convenient way of exposure to the non-Brazil South America. The country is also hosting many large tech firms which has diversified the country’s economic infrastructure and is keeping the Chile ETF strong.