ETF Spotlight: iShares MSCI Peru (EPU) | ETF Trends

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.

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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.