Market Overview

Taking A Look At The Colombia ETF (GXG)

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Taking A Look At The Colombia ETF GXG

The ETF Professor tries to keep abreast of what's going on with emerging markets ETFs and these ETFs have been hot lately, particularly the Latin America offerings.

There is a fair amount of country-specific ETFs for this region. Brazil has two equity ETFs. Mexico has one. Even Peru and Chile have equity ETFs. Another country that may be worth taking a look at is Colombia.

There is one Colombia ETF that started trading earlier this year, the Global X/InterBolsa FTSE Colombia 20 ETF (NYSE: GXG). GXG is thinly traded, but its performance since inception is impressive and mirrors that of the iShares MSCI Brazil Index (NYSE: EWZ).

Colombia has been a frontier market to be sure, torn apart by its reputation for civil strife and political instability. That's in the past. Colombia has taken painstaking efforts to change that and encourage foreign investment.

Financial services and energy account for more than 63% of GXG's sector holdings and two stocks that trade in the U.S., Bancolombia (NYSE: CIB) and Ecopetrol (NYSE: EC) account for 39% of GXG's equity holdings.

Colombia is the fourth-largest country in South America and its economy is resource dependent, exporting coal, coffee and oil, and those good items to be an exporter of right now.

This is a growing market and GXG is the best way for U.S. investors to gain access to it. The Professor notes iShares is also planning a Colombia ETF, but for now GXG is the only way to go.

Posted-In: Long Ideas Emerging Market ETFs Trading Ideas ETFs

 

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