Peru ETF: Rising Economy and Gold Prices

August 17th at 4:01pm by Tom Lydon

An exchange traded fund for Peru has bounced this week following solid economic data, while rising gold prices may also help the country, a top producer of the precious metal.

Peru’s economy expanded at a rate of 5.33% in June. Although June’s total output was lower than analysts anticipated, strong domestic demand and external demand should continue to drive the economy. This is Peru’s 22nd month of consecutive gains, according to the government, reports Robert Kozak for The Wall Street Journal. [Peru ETF and the Elections]

The iShares MSCI Peru (NYSEArca: EPU) has been volatile after the election of President Ollanta Humala. [Gold Prices Impacting Single-Country ETFs]

“While growth has slowed in recent months, the slowing appears driven by election jitters that hit investment and confidence. With positive initial moves from the administration, investment should begin to rebound,” Morgan Stanley said in a report. [Peru ETF Trends Lower]

Moreover, Peru is responsible for about 6% of world gold production. Peru was one of the best-performing countries after Fed chief Ben Bernanke floated the possibility of QE3 recently, writes Russ Koesterich at  the iShares blog.

The economy has a projected growth rate of 6.5% for 2011, and 5.9% next year, according to the International Monetary Fund.

The Global X FTSE Andean 40 (NYSEArca: AND) gives exposure to Peru, Chile and Colombia, in one fund.

iShares MSCI Peru


Tisha Guerrero contributed to this article.

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.

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AND EPU