The Latin Frontiers Beckon
A return of 14% till now for 2012 is a progressive return by any investment school's perspective
. Exact figures of what the broad investment products like
Chile ETF or in general the Latin American funds minus Brazil have been delivering.
For Latin American read ex Brazil because the focus is on the South American Frontier economies like Peru, Chile and Columbia. And these high yielding funds are all ex Brazil with the entire allocation to these nations.
Ex Brazil? Yes that's right?
The phenomenon is catching up as it did once in Asia. After Japan delivered a long innings as an emerging market, an abundance of Ex Japan funds came in the capital markets, simply because the anticipated returns on the other Asian markets were higher and they had more potential to grow, whereas Japan's growth was already consolidated with a lesser upside left. The investor interest is rapidly increasing with Long Outlook on the likes of country centric funds like Peru ETF and Large Cap Equities from the Peruvian, Columbian and Chilean region.
Why a FTSE Andean 40 based equity traded fund [ETF]?
Well! If double digit annual returns don't excite you? Hear This! These niche markets today are atop a sound fiscal footing owing to the sharp price rises in the metal commodity sector. The Investor class, who has until now ignored the region have realized the upside potential and are increasingly investing in pure play funds like Global X [AND] correlating to the performance of FTSE Index.
The FTSE Andean 40 benchmark appreciated more than 50 % in 2010. The same opportunity beckons the investors today who enter the Latino ETFs tracking the benchmark.
It's a material world!
These countries have a massive wealth of minerals and precious metals confined in their borders, and what's better is a clear uptrend navigation that the said economies enjoy from their leadership. The trade barriers are opened up and the state policies are built around the betterment of the economic growth. Columbia now boasts of a Free Trade Policy with USA and along with Peru, both countries are already dealing with EU under a Free Legal Trade Policy. Chile, for one is already benefiting from the free trade with America, Canada and even China.
Chile is the first ever South American Nation to enjoy a Free Trade Agreement [FTA] with the Asian giant.
The buck does not stop here!
Back in 2011, the three nations created a united cross border market exchange called MILA [Integrated Latin American Market] by fusing the stock markets of Peru, Chile and Columbia. The move has won kudos from the finance pundits worldwide and now even Mexican Capital Markets are set to merge with MILA exchange by 2013. The big brother Brazil too, is giving it a serious thought. The material wealth that is unlocked on the Andean frontier is the biggest draw for the investors which is fuelled effectively by the Government reforms so much so that according to The World Bank, these countries are highest ranked in Latino continent for the favorable environ they provide for the investors through Clear Investor Protection Laws, Simpler Credit Access and most importantly a Inter Border Trading Platform.
MILA's estimated Market Cap is at $ 670 billion as per the 2012 report of World Federation of Exchanges and may surpass the Brazil Bovespa, once the Mexico joins in. Thus If anyone was long on Brazil a few years ago, he clearly knows the extent of bounty that is there to be taken on the Andean Voyage.
US Investors not updated with regions' economy, but assured with the asset class should consider broader investments like Peruvian or Chilean Equity Traded funds or even better a Global X Andean 40 ETF that exposes investors to all three countries. Individual stock-wise investors should study Ecopetrol, the largest Oil and Gas Company of Columbia; it has received upgraded outlooks by almost all analyst types including Fitch which has revised it from Stable to positive.
by: waller
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