Chile ETF Provides a Great Opportunity for US Investors

Chile: A Traveler's Literary CompanionWhy is Chile ETF showing a bright future for the US investors? We know that Chile recently went through one of its worst economic slump and now we have seen signs of life in Chile and its ETF. It is iShares MSCI Chile (ECH), which launched in November 2007, has gone up nearly 83% year-to-date.
ECH is a single country fund that is diversified over many sectors. About 50% of ECH is allocated in utilities and industrial stocks, another 17% in materials, and 13% in consumer-related. Chile accounts for 33% of the world’s metal production and ECH also provides exposure to copper.

Below are several reasons why there is an optimism on Chile’s economy:
  • Chile has posted an economic growth in 2009 that signals the end of the economic slump.
  • The higher external demand and higher metal prices along with Chile’s fiscal stimulus caused the economy to exit out of its recession in the 3rd quarter of 2009.
  • Chile GDP grew at a pace of 1.1% compared to its previous quarter.
  • Chile’s central bank decided to hold its interest rate steady at 0.50% for a fifth consecutive month and reiterated that it would hold the rate steady at least until the second quarter of 2010.
  • The Organisation for Economic Co-Operation and Development (OECD) invited Chile to be the second Latin American member after Mexico. Chile will be the 31st member country.
What are your thought on possibly adding Chile to your portfolio? Do you believe there is a bright future ahead in Chile’s economy going into 2010?

Other Related Articles:
China ETF
Top 10 ETFs

No comments: