ETF Spotlight: iShares MSCI Peru (EPU)
December 8th at 2:00pm by Tom Lydon
ETF Spotlight on iShares MSCI Peru (NYSEArca: EPU), part of a weekly series.
Assets: $547.2 million
Objective: Tracks the MSCI All Peru Capped Index, which holds companies headquartered in Peru and have the majority of their operations based there.
Holdings: EPU gives a large portion of its exposure to miners. Ithas a 17.7% weighting in Compania de Minsa Buenaventura (NYSE: BVN), a precious metals miner and a 14.4% weighting in Southern Copper Corporation (NYSE: SCCO), a copper mining and refining company.
What You Should Know
- EPU gives 60.5% of its total weight to materials, so above all else, EPU can be an indirect commodities play. [Latin America's ETF Hot Spots.]
- The next largest sector is financials, which are 20.6% of the fund. Consumer staples, industrials, utilities and energy are all represented in amounts of 7% or less.
- EPU is the only ETF that gives direct exposure to the Peruvian economy; iShares Latin America 40 (NYSEArca: ILF) has a small 4.6% weighting in the country
The Latest News
- This year has been a good one for Peru. The Latin American country’s economy boomed in the third quarter, expanding 9.5% over a year earlier, the fastest pace in more than 10 years, says Investor’s Business Daily.
- Peru is in need of infrastructure money, and it recently received a $500 million loan from the Latin American Development Bank to improve its roads, says Andina.
- The retail sector in Peru is booming, particularly when it comes to supermarkets and clothing, says Latin Business Chronicle. The booming economy has created a feeling of confidence in the country’s denizens.
- By the same token, credit demand is way up in Peru, too. The country’s biggest financial-holding company, Credicorp (NYSE: BAP) – which is 14.2% of EPU – says its earnings this year are on pace to set a record, reports The Wall Street Journal.
