Don't Sleep On Chile as an Emerging Market Play

Related: Emerging Markets ETFs Gain Technical Momentum

ECH holds 32 stocks, 13.4% of which hail from the materials sector. The utilities and financial services sectors combine for about 44% of the ETF’s weight. Consumer discretionary and consumer staples names combine for 20.6% of the ETF’s weight.

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.

“The IPSA spent the 2nd quarter in a consolidation pattern, digesting the 1st quarter move in about as optimal a fashion as a Chile bull could have hoped. For 3 months, the index never dropped more than 3% below its rally highs, until a brief dip toward the end of June in what we surmised may simply be a “shakeout”. Indeed, the index snapped back immediately in slingshot fashion, hitting new multi-year highs in early July,” according to ETF Daily News.