Peru is the world’s largest silver producer. It is also a major producer of gold and copper and as EZA has shown investors, being levered to the metals trade in such fashion is, well, not good when metal prices decline. [Metals Miners Fall in Past Month]

Hindering EPU is not just the fact that investors perceive the ETF to be metals heavy. This is a scenario that is seen with the iShares MSCI Chile Investable Market Index Fund (NYSEArca: ECH). Many investors know that Chile is the world’s largest copper producer, but ECH is not all that heavy on materials stocks. On the other hand, EPU allocates 46% of its weight to the materials sector and that probably explains why the ETF has been by far the worst performer of group including itself, ECH and the comparable Brazil and Colombia ETFs this year.

iShares MSCI All Peru Capped Index Fund

ETF Trends editorial team contributed to this post.