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  • Andean Region Gaining The Intelligent Investors Choice 0 comments
    Oct 16, 2013 4:37 AM

    Latin America is one of the potential emerging markets to look at for profitable investment opportunities. Mostly when we talk about Emerging economies the first two that come to every investors mind are -China and India. But the Latin economies are gaining momentum and are showing signs of profitability for the investors that have started to keep track of these markets as well. The reason being that this region is mineral and resource rich, making it a worthwhile commodity rich region for investments. Looking further into the Latin American region we find the region further bifurcated into various countries, of which the Andean region is the most dynamic financial market.

    There seems to be a popular bustle in the financial market that Brazil is the most potential equities for the investors but there is a much more potential market in the Andean region that has a lot more to offer. The equity market of Chile is the latest on the bloc to offer the best opportunities to the inquisitive investors. The economy of Chile is smaller than the Brazilian market but is definitely in a much more better shape than the former. The Chilean economy scores higher than the former in P/E ratios. The economy has a budget surplus which makes it all the more attractive for investments because as the saying goes- it is always much more profitable to invest in those economies that show a surplus budget than a deficit one. Among the other South American economies, Chile has the most robust budget to offer. The largest revenue of the economy comes from its mining sector but the country is doing exceedingly well in the financial and manufacturing sector as well.

    According to the CORFO Chile statistics, the contribution of the Financial services to the economy towards the GDP is approximatly 16%, the same share as the Copper mining sector contributes towards the economy , followed by the manufacturing sector just 2% lesser than the two holding the first place. The countries GDP is anticipated to show a growth of 4.6% in 2013, and the unemployment rates also show case the wellbeing of the economy. Those investors that add the Chile ETF to their basket of portfolios are increasing their probability of profits.

    The other economies that belong to the Andean region are Colombia and Peru. The Peruvian economy is expected to grow at good rates according to the IMF. The economy has the credit of being one of the largest producers of gold and silver and among the top five producers of Copper. The Peru ETFs are gaining popularity day by day. The Andean global x fund is the right funding vehicle to provide the desired exposure in the Peruvian economy.

    Due to the implementation of pro-market reforms in the Andean Region, and a clear reduction of trade barriers, the region is likely to hold strong trade basis globally. The enthusiastic political governance in this part of the globe is expected to add a concrete plaster to the growth bricks being built steadily and smartly.

    Global X FTSE Andean 40 ETF [AND] is a pure play on the region which consists of Colombia, Peru and Chile of the name sake Index. The Andean global x fund bifurcates with its sector allocations with the Utilities sector at the top most followed by the Materials, Financials, and Energy and Consumer Staples sector respectively. The other two ETFs that have gained momentum are the Peru ETF and Chile ETF . The issuers charge an annual expense of 0.72% for providing the desired exposure to the 40 largest and most liquid companies listed on the Chile, Colombia and Peru stock exchanges.

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