Peru’s Economy On Fire; How to Capture It With ETFs

June 26th at 1:00am by Tom Lydon

images76 Peru is on track to become one of the fastest-growing economies in the entire world, so the latest exchange traded fund (ETF) that launched has good timing.The country of Peru has been rated investment grade by Fitch, Moody’s and S&P, so why not incorporate an ETF to track the growing country into your portfolio. The latest ETF from iShares is the MSCI All Peru Capped Index Fund (EPU) which has an expense ratio of 0.63%. The ETF tracks the MSCI All Peru Capped Index, according to the iShares website.

The fund’s top sector weighting is in materials, at 65.2%. That’s followed by financials, 15.2%; utilities, 5.9%; and consumer staples, 5%. There are 25 components overall.

Peru touts the lowest annual inflation of any other Latin American country and has low fiscal and external threats. The macroeconomic fundamentals are strong, and Peru’s credit rating is higher than Brazil’s. Increased foreign direct investment has put Peru on the radar screen of many investors, and this trend could continue throughout 2009. Peru’s projected growth rate this year is set at 4%, a slowdown from 9.8% in 2008.

This is the first ETF to target Peru. Another one is expected soon from new fund provider Global X, which currently has a Colombia-focused fund.

For more stories on new ETFs, visit our new ETF category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Tickers

EPU