“Copper roughly represents 40% of the country’s export revenue and minerals constitute the majority of the revenue in total,” according to Emerging Equity.
There are hopes for rebounds for Chilean stocks and ECH. The country is a seen as a winner in a low oil price environment and stocks there are inexpensive relative to historical averages. [An ETF Idea for Low Oil Prices]
Still, that doesn’t erase the fact that ECH is off 15% year-to-date and that the outlook for copper is getting worse, not better.
“Chinese copper demand has been lackluster this year with unwrought copper imports down 5.5 percent year over year in September. It is possible that the effects of continued PBoC easing on copper demand won’t be seen until early 2016,” said the Wells Fargo Investment Institute in a note posted by Barron’s.
iPath Dow Jones-UBS Copper Subindex Total Return ETN
