This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Newest Emerging Market Play: Colombia

Colombia, infamous for drug trafficking and violence, is presenting new investment opportunities through an exchange-traded fund that's making it easier to access its fledgling stock market.

The Global X /InterBolsa FTSE Colombia 20 ETF (GXG), which began trading in December, is the first fund from New York-based Global X Management Co. The company plans to introduce funds that invest in Egyptian and Peruvian stocks next.

Colombia Versus U.S.
Bigcharts.com

Cocaine trading and political instability in Colombia have made headlines for decades, particularly during the murderous reign of Medellin cartel leader Pablo Escobar. But in recent years, Colombia's economy has benefited from the rise of free-trade attitudes under President Alvaro Uribe. As a result, the country's economy grew 3.1% during the first nine months of last year as the U.S. economy shrank.

Resource-rich Colombia exports oil, coffee, coal and nickel. It's home to 44 million people, and the U.S. is its biggest customer, accounting for 35% of exports. Colombia's inflation is 7.18%, higher than the 5% target of its central bank.

Data shows that stocks in emerging markets often rise when U.S. equities fall. Last year, Colombian stocks followed the trajectory of the S&P 500, but evidence suggests they might be headed in opposite directions.

The Global X ETF holds 20 stocks, reflecting Colombia's few publicly traded companies and low liquidity. Holdings in oil company Ecopetrol SA (EC) and Bancolombia SA (CIB) account for 40% of the fund's assets, an unusually high concentration for an ETF.

GXG allots half its assets to financial companies, and energy and materials stocks make up a third. Less than 2% of the fund is invested in telecommunications.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
GXG $12.18 2.44%
CIB $45.79 2.35%
AAPL $132.65 1.82%
FB $81.91 0.47%
GOOG $555.37 -1.71%

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs