Chile May Not Need China to Shed Laggard Status
Chile wears the crown as the world's largest copper-producing nation.
At the domestic level, there is at least one primary risk to Chile's internal consumption ambitions. Since the government does not provide its employees with the types of grandiose pensions that are so common in the US and Western Europe, Chileans are savers. The country has a mandatory savings plan in place for state workers, leading to one of the highest savings rates in the world.
However, those additional deposits are good for Chilean banks. ECH devotes 18.4% of its weight to financial services name and in Chile that is not a bad thing as the country is home to arguably Latin America's most advanced, regulated, sophisticated, and transparent banking sector.
Another potential sticking point for some is ECH's premium valuation. The MSCI Chile Investable Market Index trades with a forward P/E of 16.2, making it the second most expensive South American Index behind the MSCI Colombia Index.
Brazil, the region's largest economy, but the true ETF laggard as measured by the iShares MSCI Brazil Index Fund (NYSEARCA:EWZ), trades with a forward P/E of just 10.5 on the index tracked by EWZ. Inexpensive equities have lured some to EWZ in recent weeks, but even a 7.14% increase in the past month for that ETF trails ECH by 90 basis points.
Below, find some more great ETF and market content from Benzinga:
GameStop Sales Plummet, Can the Video Game Retailer Survive?
How Will Chuck Hagel Affect Defense Stocks?
What Does Samsung's Guidance Say About Apple's Quarter?
Benzinga Pro covers this and all market news in real time. Get your free trial here.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.