Friday, July 5, 2013

China Sector ETFs

Emerging LatAm Economies Investors seeking growth in Latin America often consider Brazil to be the only option - however, this view overlooks the rapidly developing Andean region that includes the economies of Chile, Colombia and Peru. These three countries have enjoyed great success in recent years through implementation of pro-market reforms, reduction of trade barriers, and solid political governance that has become a model for the region. Furthermore, the Andean nations are key producers of commodities such as oil, copper, gold, natural gas and coffee, and have been using these natural resources to develop trade agreements and direct investment from major economies like the U.S. and China. The Global X FTSE Andean 40 ETF (AND) provides investors with a way to diversify their Latin America exposure and gain access to several of the most dynamic economies in the region.
Integration, Trade, Reform
Cross-Border Expansion - Andean companies are pursuing acquisitions and investments both in and out of the region at a rapid rate. One notable area is the financial sector, where firms from Chile, Colombia and Peru have been snapping up assets as European financial firms seek capital to shore up balance sheets at home (The Economist, 2012).
MILA Integration - Chile, Colombia and Peru merged their stock markets in 2011 to create a single, cross-border trading platform known as MILA, or the Integrated Latin American Market.The goal of MILA is to increase liquidity, expand access to capital and improve economic cooperation in the region - Mexico could join the MILA exchange as early as 2013, and Brazil's Bovespa exchange recently expressed interest in potential integration (Wall Street Journal, 2012)
Integration, Trade, Reform
Ease of Doing Business - Chile, Colombia and Peru were the three highest ranking South American countries in the 2011 "Doing Business" rankings from the World Bank, which ranks economies based on factors such as protecting investors, accessing credit and trading across borders.
Free Trade Agreements - In addition to the Colombia/U.S. free trade agreement that became effective in 2012, Colombia and Peru have also approved a free trade deal with the EU that may boost their economies by 1% each (Reuters, 2012). Chile has long-standing free trade agreements with the U.S. and Canada, and was the first LatAm country to sign an FTA with China in 2006.

Source: http://www.globalxfunds.com/andeanetf/content.html

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