Checking In: South America ex-Brazil (AND, GXG, EPU)
For nearly as long as there has been a South American investment theme, that theme has predominantly been about Brazil. Chile's status as the world's largest copper producer adds relevance to that market, but other South American nations such as Colombia and Peru are often left fighting for U.S. investors' table scraps.
All commodities rich nationsChile, Colombia and Peru, while home to small economies than Brazil, have earned their respective places at the South American investment table. Hence, now is the ideal to time check in with the Global X FTSE Andean 40 ETF (NYSE: AND), which just celebrated its first birthday.
The Global X FTSE Andean 40 ETF was the first ETF to offer exposure to multiple LatAm economies while excluding Brazil and Mexico. Debuting in 2011 almost certainly hurt the ETF as emerging markets were not exactly in style last year and with Brazil ETF's suffering, it was hard for investors to embrace South America's other players.
These days, AND sports over $7.3 million in assets under management and is up almost 14% year-to-date, a performance that finally validates our long-held bullish view of the fund.
AND is easily the best way ordinary U.S. investors have accessing the Mercados Integrados LatinoAmericanos exchange, or MILA, a combination boerse that links the rapidly growing South American markets of Chile, Colombia and Peru. MILA is the second-largest Latin American boerse by market value, trailing only Brazil's Bovespa, that country's benchmark exchange.
Beyond that, there are fewer than 20 Chilean, Colombian and Peruvian stocks COMBINDE trading in the U.S. and that only adds to AND's utility in an environment that is rewarding LatAm stocks and ETFs. Today, AND is 51% allocated to Chile, 29% allocated to Colombia and Peru makes up the difference.
One big question surrounding AND's outlook and ability to not only survive but thrive is the ETF's ability to be even just a tad more attractive than ETFs such as the iShares MSCI Chile Investable Market Index Fund (NYSE: ECH), the iShares MSCI Peru All Capped Index Fund (NYSE: EPU) and the Global X FTSE Colombia 20 ETF (NYSE: GXG).
Year-to-date, AND has lagged ECH by a decent margin, trailed GXG by a slim distance and thumped EPU. It's kind of split decision. However, AND is useful for those investors that are looking to add some non-Brazil LatAm exposure to their portfolios and just cannot make up their minds as to which country-specific ETF they think is best.
Granted, it's just one day, but noteworthy is the fact that AND's volume on Monday was nearly seven times the daily average and there have been some impressive increases in daily turnover recently. Should volume support a move higher, AND could have upside of 10% or more from current levels.
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