Bought a 5% position in IShares Inc MCSI Chile Investable Market Index Fund (Ticker: ECH) at $73.91.
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 non-diversified. The net expense ratio is 0.65%.
This investment plays into a couple angles, including expected growing inflationary pressure in commodities, continued economic growth and investment in developing countries like China and India, and the on-going deterioration of the dollar.
Chile's economy is open and largely driven by mining and exports. Specifically, the country is one of the largest suppliers of copper in the world according to the British Geological Survey. Copper mining accounted for about 14% of Chile's GDP in 2009, according to the Central Bank of Chile. Copper prices recently hit a two-year high, which should provide significant economic stimulus to the economy and Chile Peso.
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