“Last year there were only seven exploratory wells drilled in Peru compared to a total of 115 that were drilled in Colombia,” according to Emerging Equity. Over the past three years, EPU has fallen almost 6% while the Global X MSCI Colombia 20 ETF (NYSEArca: GXG) is higher by nearly 4%. [GDP Surge Lifts Colombia ETFs]
Colombia is one of the fastest-growing oil producers in the world and Mexico’s emergence as a more legitimate player on the Latin America oil stage could be signs “Peru risks losing energy investment in light of Mexico’s landmark energy reforms,” according to Emerging Equity.
Some sector diversity for Peru’s fast-growing economy could serve it and EPU well. Although the ETF is up 8.1% this year, EPU has lost nearly $30 million in assets due to the fund’s long-standing and intimate correlations to gold and silver prices.
Peru is one of the largest silver producers and a major gold producer as well, facts highlighted by EPU’s 49.4% weight to the materials sector. That trait has, historically, made EPU vulnerable at times of retreating gold and silver prices.
iShares MSCI All Peru Capped ETF
