This year, the iShares MSCI Chile Capped ETF (NYSEArca: ECH) is one of the best-performing emerging markets single-country exchange traded funds.
The lone ETF dedicated to Chilean equities is higher by more than 26% and it is possible the Chile ETF will keep delivering for investors in 2017.
Although Chile is viewed by some market observers as the most advanced and open South American economy and it is undeniably home to Latin America’s highest sovereign credit rating (AA-), there is also no denying the country’s dependence on copper exports as a driver of government revenue.
Chile’s dependence on copper could be a positive for ECH over the coming months.
Copper prices are benefiting as investors anticipate greater demand out of China and increased infrastructure projects under president-elect Donald Trump. Some professional traders are reacting by increasing bullish bets on the red metal.