What do Chile, Brazil and South Africa have in common, aside from all having their own country-focused exchange traded fund (ETF)? The three countries are all facing inflation, and along with this, slower growth, but Chile stands out as a diamond in the rough markets.

Chile boasts the best-performing Latin stock market this year. It also has the potentional to be a safe haven and may benefit from easing inflation, report James Attwood and Nathan Gill for Bloomberg. iShares MSCI Chile Index (ECH) is in a good position to dodge global financial turmoil. ECH is down 15.7%  year-to-date.

Chile has made great strides in the last 20 to 30 years to insulate itself from international capital flows, says an analyst. The country has also reduced its dependence on copper as a source of its economic strength.

Brazil’s ETF has had a rougher ride, as the country’s stocks trade lower on falling commodity prices and slower global growth. Earnings reports are expected to be lower than anticipated, report Alexander Ragir and William Freebairn for Bloomberg. Experts do not see Brazil as a safe hideout during the recent global turmoil, and iShares MSCI Brazil (EWZ) may reflect this already. EWZ is down 26.8% year-to-date.

Meanwhile, on the other side of the world, South Africa is facing radical political turmoil that worsened recently after President Thabo Mbeki resigned. Opposing parties called the exodus of 11 cabinet members a disaster for the stability if the country, which trickles into the economy, reports Jonathan Clayton for Times Online.

This is not good for for the depth of division in the country and could lead to the revival of ineffective opposition, not what iShares MSCI South Africa (EZA) needs. Also at stake is the newer NETS FTSE/JSE Top 40 Index (JNB). EZA is down 19.2% year-to-date, while JNB is down 32.3% since its May 22 inception.

Tags: Brazil, Chile, Emerging Markets, EWC, EWZ, EZA, JNB, Latin America, South Africa

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