Why Investors Can Consider Chilean Stocks Now

Posted by on

Chile must be on the radar of emerging markets investors. Among the major markets in Latin America, Chile is one of the best market due to many factors. Equity investors looking for emerging market opportunities now can especially consider adding Chilean stock. Some of the reasons why Chilean stocks offer excellent potential for income and growth are:

  • Chile is the world’s largest copper producer and exporter. After years of falling copper prices, copper is slowing moving up since the last quarter as shown in the chart below:

Click to enlarge

Source: Kitco

As copper prices go up the Chilean economy will benefit. Moreover it should be noted that copper accounts for about half of all exports from Chile.

  • Chile is known for political stability in a region filled with many unstable economies.
  • The country is a member of the OECD and has numerous free-trade agreements enabling Chile to take advantage of trade partnerships with many countries.
  • Companies in Chile are required by law to distribute dividends to shareholders. By law, firms must pay at least 30% of their profits to shareholders. This type of law is unique in emerging countries.
  • This year general elections are due in November.

Some of the Chilean ADRs that investors can consider for further research include: Banco Santander- Chile (BSAC), Banco de Chile (BCH), Empresa Nacional de Electricidad SA (EOC), Itau CorpBanca (ITCB) and Vina Concha y Toro ( VCO)

The complete list of Chilean ADRs trading on the US markets can be found is here.

Disclosure: Long BCH and ITCB

Index Returns: Developed, Emerging and Frontier Markets 2006-2015

Posted by on

I recently came across the following unique chart that compares the returns of Developed, Emerging and Frontier Markets from 2006 thru 2015. The popular charts like Single Country Index Returns chart, emerging markets returns chart, Callan Periodic Table of Investment Returns are easily available online. I will post the updated chart for 2016 when it is published.

Click to enlarge

Source: Mirae Asset Global Investments (USA) LLC

Note: The returns shown above are total returns which includes dividend reinvested.

Download: Index Returns: Developed, Emerging and Frontier Markets 2006-2015 (in pdf)

A few observations:

  • The US market as represented by S&P 500 has performed well relative to other markets since 2008. Even in 2008, when emerging and frontier markets plunged by 50% or more, the S&P 500 fell only 37%.
  • In terms of annualized returns over 10 years, Chinese stocks did not have awesome returns when compared to US stocks. As an emerging market that experienced explosive economic growth one would have expected Chinese stocks to vastly outperform US equities.
  • In 2014, Russia was the worst performer but in 2015 it was the best performer. This shows the futility of picking markets and the importance of diversification.

Related ETFs:

  • iShares MSCI Emerging Markets ETF (EEM)
  • Vanguard MSCI Emerging Markets ETF (VWO)
  • SPDR S&P 500 ETF (SPY)
  • PowerShares MENA Frontier Countries ETF (PMNA)

Disclosure: No Positions

The List of New York Stock Exchange Holidays for 2017

Posted by on

The New York Stock Exchange(NYSE) will be closed for the following holidays in 2017:

Source: NYSE

NYSE will observe a total of nine holidays in 2017. On two days the market will close early at 1 PM. These are on July 3rd – the day before Independence Day and Nov 24th – the day after Thanksgiving Day.

On Columbus Day (October 9) and Veteran’s Day (November 11) the NYSE will be open. However the bonds markets will be closed.

Download: The List of New York Stock Exchange Holidays for 2017 (in Excel)