The Chile ETF Is Showing Much Needed Strength Since The Massive Earthquake

“The massive earthquake that struck Chile will require as much as $30 billion to rebuild devastated infrastructure. Silver linings: The country is an economic powerhouse, and its stock market was unscathed. The market’s resiliency could help bring needed capital into the country and speed reconstruction. Plenty needs to be done. Many companies halted production and services. The epicenter was near paper and pulp mills, fishing ports and vineyards. Stores suffered from looting, though about $2 million in goods have reportedly been returned,” Trang Ho Reports From IBD.

“Although the economy will suffer the negative effects of the earthquake at the end of February,” wrote Alfredo Coutino, an economist at Moody’s Economy.com, “we expect the economy to recover faster in the second half of the year, additionally stimulated by the reconstruction process.” Chile’s economy is projected to grow 3% to 4% this year after shrinking 1.7% in 2009, Coutino says.

Ho goes on to say, “Given Chile’s fundamentals, it is a great place to invest, says Carl Delfeld, managing director of ChartwellETF.com. Chile’s national debt amounts to only 9% of GDP, compared with 46.8% for Brazil and 42.6% for Mexico, according to the CIA. Chile’s exports account for 40% of GDP, with copper making up a third of government revenue. The country has about $25.4 billion in reserves, which comes to 10% of 2009 GDP. The only U.S.-traded ETF tracking the country, iShares MSCI Chile Index (ECH), has risen for four weeks in a row and trades 5% below its 52-week high of 60.94.”

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Here are some details on theiShares MSCI Chile ETF (ECH):

The investment (ECH) seeks to track the performance of MSCI Chile Investable Market index. The fund invests at least 90% of assets in the securities of the underlying index or in depositary receipts representing securities in the underlying index. The underlying index is a free float-adjusted market capitalization index that is designed to measure broad based equity market performance in Chile. The fund is nondiversified.

TOP 10 HOLDINGS ( 72.39% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Banco Santander-Chile N/A 4.77
CAP N/A 4.5
Cencosud SA N/A 5.12
Empresa Nacional de Electricidad (chile) N/A 10.2
Empresas Cmpc SA N/A 8.83
Empresas COPEC N/A 13.57
Enersis SA N/A 11
Lan Airlines SA N/A 4.39
S.A.C.I. Falabella N/A 3.68
Sociedad Quimica y Minera de Chile N/A 6.33

Chart for iShares MSCI Chile Investable Mkt Idx (ECH)

 

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