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Top 10 Latin America Single-Country ETFs

Our goal in this profile is to help investors wade through the many competing ETF offerings available. Using our long experience as an ETF publication, and nearly 40 years in the investment business, we can help select those ETFs that matter and may or may not be repetitive. The result is a more manageable list of issues from which to view and make selections.

There is currently an expanding list of 16 ETFs oriented to individual Latin American countries whether small cap or even subsectors. The following analysis features a fair representation of ETFs available. We believe from these investors may choose an appropriate ETF to satisfy the best index-based offerings individuals and financial advisors may utilize.

Nevertheless, our star ranking system is just one way to select the best ETFs in the category. Below is our methodology for ranking the ETFs within the category.


Strong established linked index
Excellent consistent performance and index tracking
Low fee structure
Strong portfolio suitability
Excellent liquidity


Established linked index even if "enhanced"
Good performance or more volatile if "enhanced" index
Average to higher fee structure
Good portfolio suitability or more active management if "enhanced" index
Decent liquidity


Enhanced or seasoned index
Less consistent performance and more volatile
Fees higher than average
Portfolio suitability would need more active trading
Average to below average liquidity


Index is new
Issue is new and needs seasoning
Fees are high
Portfolio suitability also needs seasoning
Liquidity below average

ETFs are based on indexes tied to well-known index providers including Russell, S&P, Barclays, MSCI, Dow Jones, Van Eck, Global X and so forth.  While many ETFs listed here fill important niches most are quite new and have lower star ratings until they season longer.

Where competitive issues exist and/or repetitive issues available at a fee cost saving we mention those as other choices. New issues are coming to market consistently (especially globally) and sometimes these issues will need to become more seasoned before they may be included at least in our listings.

We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Premium members to the ETF Digest receive added signals when markets become extended such as DeMark triggers to exit overbought/oversold conditions.

For traders and investors wishing to hedge, leveraged and inverse issues are available to utilize from ProShares and Direxion and where available these are noted.

#1: iShares MSCI MExicon Investable Market Index Fund (EWW)

 

EWW follows the MSCI Mexico Investable Market Index which is the typical proprietary index covering the scope of the Mexican stock market. The fund was launched in March 1996. The expense ratio is .53%. AUM (Assets under Management) equal $1.1 billion and average daily volume is 3.1M shares. As of early November 2011 the annual dividend yield was 1.50% and YTD return -10.40%.

ProShares features ultra long and short leveraged ETFs for investors wishing to hedge of speculate on EWW.

EWW Top Ten Holdings & Weightings

Data as of November 2011

1.    America Movil SAB de CV (AMX L): 24.60%

2.    Wal-Mart De Mexico SAB de CV (WALMEX V): 10.20%

3.    Fomento Económico Mexicano, S.A.B. De C.V. (FEMSA UBD): 8.90%

4.    Grupo Mexico, S.A.B De C.V (GMEXICO B): 5.71%

5.    Grupo Televisa SA (TLEVISACPO): 4.61%

6.    Grupo Elektra, S.A. de C. V. (ELEKTRA): 4.00%

7.    Telefonos de Mexico SAB de CV (TELMEX L): 3.70%

8.    Grupo Financiero Banorte, S.A.B De C.V. (GFNORTE O): 3.24%

9.    Industrias Penoles SAB de CV (PE&OLES): 3.08%

10.  Grupo Modelo SAB de CV (GMODELO C): 2.97%

#2: iShares MSCI Brazil Index Fund (EWZ)

 

EWZ follows the MSCI Brazil Index. The fund was launched in July 2000. The expense ratio is .61%. AUM equal $10 billion and average daily trading volume is 19M shares. As of early November 2011 the annual dividend yield was.5.75% and YTD return was a negative -20.77%.

ProShares offers leveraged long and short ETFs for speculators and hedgers for short-term use.

Data as of November 2011

EWZ Top Ten Holdings & Weightings

1.    Petroleo Brasileiro SA Petrobras: 9.58%

2.    Vale S.A. Pfd Shs -A- (VALE5): 9.45%

3.    Itau Unibanco Holding S.A. (ITUB3): 7.93%

4.    Petroleo Brasileiro SA Petrobras (PETR3): 7.42%

5.    Vale S.A. ADR (VALE): 6.56%

6.    Banco Bradesco Sa Brad (BBDC4): 6.15%

7.    Ambev Cia De Bebid: 5.06%

8.    Itausa Investimentos ITAÚ S.A. (ITSA4): 2.70%

9.    BRF - Brasil Foods SA (BRFS3): 2.58%

10.  BMF Bovespa S.A. Bolsa Valores Merc Fut (BVMF3): 2.06%

#3: iShares MSCI Chile Investable Market Index Fund (ECH)

 

ECH follows the MSCI Chile Investable Market Index which like other MSCI indexes follows a proprietary methodology of creating an appropriate index. The fund was launched in November 2007. The expense ratio is .61%. AUM equal $564 million and average daily trading volume is 250K shares. As of early November the annual dividend yield was 1.45% and YTD return was -21.00%

ECH Top Ten Holdings & Weightings

Data as of November 2011

1.    Empresas COPEC SA ( COPEC ): 9.55%

2.    Cencosud SA ( CENCOSUD ): 8.74%

3.    Empresa Nacional de Electricidad SA (Chile) ( ENDESA ): 8.34%

4.    Soc Quimica Y Minera Chile B Common Stock Npv: 8.15%

5.    Enersis SA ( ENERSIS ): 7.78%

6.    Empresas CMPC SA ( CMPC ): 6.57%

7.    S.A.C.I. Falabella ( FALABELLA ): 5.13%

8.    Banco Santander Chile ( BSANTANDER ): 4.91%

9.    Lan Airlines SA ( LAN ): 4.37%

10.  CAP SA ( CAP ): 4.17%

 

 

 

#4: Global X Columbia ETF (GXG)

 

GXG follows the FTSE Colombia 20 Index is a market capitalization index of the most liquid 20 stocks in the Colombia market. The fund was launched in February 2009. The expense ratio is .78%. AUM equal $134 million and average daily trading volume is 163K shares. As of early November 2011 the annual dividend yield was 1.16% and YTD return was -14.40%. The fund trades commission free at Interactive Brokers. With the free trade agreement with the U.S. signed trade should improve in both directions.

GXG Top Ten Holdings & Weightings

Data as of November 2011

1.    BanColombia SA ADR (CIB): 14.14%

2.    Ecopetrol S.A. ADR (EC): 13.14%

3.    Pacific Rubiales Energy Corp. (PEGFF): 8.56%

4.    Almacenes Exito Sa, Colombia: 6.43%

5.    Grupo Aval Acciones Y Valores Grupo, Bogota: 6.30%

6.    Grupo de Inversiones Suramericana SA (XGSUR): 5.63%

7.    Grupo Nutresa S.A.: 4.84%

8.    Corporacion Financiera Colombiana SA: 4.80%

9.    Interconexion Electrica Sa Esp, Bogota: 4.72%

10.  Inversiones Argos: 4.70%

 

 

#5: Van Eck Market Vectors Brazil Small-Cap ETF (BRF)

 

BRF follows the Market Vectors Brazil Small-Cap Index which follows small-cap companies deriving at least 50% of their revenues from Brazil. The fund was launched in May 2009. The expense ratio is .62%. AUM equal $614 million and average daily trading volume is 225K shares. As of early November 2011 the annual dividend yield was 1.80% and YTD -24.20%.

 

BRF Top Ten Holdings & Weightings

Data as of November 2011

1.    Totvs S.A. (TOTS3): 4.72%

2.    Anhanguera Educacional Participacoes S.A. (AEDU3): 3.18%

3.    Odontoprev S.A. (ODPV3): 3.11%

4.    Sul America S.A. (SULA11): 3.08%

5.    Klabin SA Pfd Shs (KLBN4): 2.91%

6.    Gafisa SA ADR (GFA): 2.85%

7.    Br Properties Sa: 2.82%

8.    Santos Brasil Particpacoes SA: 2.73%

9.    Tam SA (TAM): 2.69%

10.  Suzano Bahia Sul Papel e Celulose SA: 2.37%

 

 

#6: Global X FTSE Argentina 20 ETF (ARGT)

 

ARGT follows the FTSE Argentina 20 Index which measures the top 20 companies that have high revenues or assets in Argentina. The fund was launched in March 2011. The expense ratio is .75%. AUM equal $4 million which is understandable for a new fund and is featured here because of the importance of the market. ARGT completes the range of countries (with Venezuela the exception) in Latin America away from Pioneer Funds. Average daily trading volume is less than 5K shares. As of early November 2011 the annual dividend is negligible and YTD performance was -24.30%.

ARGT Top Ten Holdings & Weightings

Data as of November 2011

1.    Tenaris SA ADR (TS): 22.81%

2.    YPF Sociedad Anonima ADR (YPF): 9.93%

3.    Arcos Dorados Holdings Inc (ARCO): 8.54%

4.    Mercadolibre, Inc. (MELI): 8.13%

5.    Telecom Argentina SA ADR (TEO): 4.96%

6.    Pampa Energia SA ADR (PAM): 4.59%

7.    Cencosud SA (CENCOSUD): 4.39%

8.    Macro Bank, Inc. ADR (BMA): 4.37%

9.    Nortel Inversora SA ADR (NTL): 4.06%

10.  Goldcorp, Inc. (GG): 3.75%

 

 

#7: iShares MSCI All Peru Capped Index Fund (EPU)

 

EPU follows the MSCI All Peru Capped Index which measures the entire Peruvian market. The fund was launched in June 2009. The expense ratio is .62%. AUM equal $416 million and average daily trading volume is 234K shares. As of early November 2011 the annual dividend yield was 2.30% and YTD performance was -19.30%.

EPU Top Ten Holdings & Weightings

Data as of November 2011

1.    Buenaventura Mining Company Inc. ADR (BVN): 19.35%

2.    Credicorp Ltd (BAP): 14.90%

3.    Southern Copper Corporation (SCCO): 9.09%

4.    Alicorp S.A.A: 5.63%

5.    Volcan, Compañia Minera S.A.A. (XVOLB): 4.55%

6.    Minsur SA Minsur: 4.23%

7.    Hochschild Mining PLC (HOC): 4.21%

8.    Grana Y Montero SA Gramon, Lima: 4.18%

9.    Sociedad Minera Cerro Verde Saa, Lima: 3.95%

10.  Intergroup Financial Services Corp: 3.60%

 

 

 

#8: Global X Brazil Consumer ETF (BRAQ)

 

BRAQ follows the Solactive Brazil Consumer Index. This is the most popular in a series of Brazil ETFs launched by Global X at the same time which include: (BRAF: financials) and BRAZ, mid-cap ETFs). The fund was launched in July 2010. The expense ratio is .77%. AUM equal $27 million and average daily trading volume is 26K shares. As of early November 2011 the annual dividend yield was .22% and YTD return was a negative -23.00%.

BRAQ Top Ten Holdings & Weightings

Data as of November 2011

1.    BRF - Brasil Foods SA ADR (BRFS): 6.21%

2.    Companhia de Bebidas das Americas Ambev ADR (ABV): 5.91%

3.    Souza Cruz SA (CRUZ3): 5.75%

4.    CIA Hering SA (HGTX3): 5.57%

5.    Brazilian Distribution Company ADR (CBD): 5.19%

6.    Lojas Americanas S.A. Pfd Shs (LAME4): 5.04%

7.    Tam SA (TAM): 5.01%

8.    Cosan SA Industria e Comercio (CSAN3): 4.99%

9.    Localiza Rent A Car S.A. (RENT3): 4.96%

10.  JBS SA (JBSS3): 4.67%

 

 

#9: iShares MSCI Brazil Small Cap Index Fund (EWZS)

EWZS follows the MSCI Brazil Small Cap Index which is the index provider's proprietary measurement of small cap equities in Brazil. The fund was launched in September 2010. The expense ratio is .65%. AUM equal $46 million and average daily trading volume is 18K shares. As of early November 2011 the annual dividend yield was 2.15% and YTD return -20.40%.

EWZS Top Ten Holdings & Weightings

Data as of November 2011

1.    BR PROPERTIES SA:  4.05%

2.    CIA SANEAMENTO MINAS GERAIS:  3.55%

3.    MARCOPOLO SA-PREF:  3.42%

4.    RANDON PARTICIPACOES SA RAP:   3.14%

5.     LLX LOGISTICA SA-ORD:  2.89%

6.    MILLS ESTRUTURAS E SERVICOS:  2.75%

7.    SANTOS BRASIL PARTICIPACOES:  2.58%

8.    TECNISA SA:  2.56%

9.     ESTACIO PARTICIPACOES SA:  2.53%

10.  EVEN CONSTRUTORA E INCORPORA:  2.51%

#10: Global X Mexico Small-Cap ETF (MEXS)

 

MEXS follows the Solactive Mexico Small-Cap Index. The issue is quite new but deserved to be mentioned given it fills a need. The fund was launched in May 2011. The expense ratio is .69%. AUM are below $1 million and average daily trading volume is less than 1K shares. As of early November 2011 the annual dividend is negligible and since its existence in May 2011 the return is -19.50%.

Obviously the ETF is quite new, but down the road could be an important addition to the entire sector and some investors may wish to wait for the ETF to gain some seasoning. With competition from larger sponsors it's possible MEXS won't make it; hence, the single star ranking.

MEXS Top Ten Holdings & Weightings
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SYM TRADE IT LAST %CHG
EPU $22.50 -2.89%
ARGT $17.51 -3.00%
ECH $34.53 -1.43%
BRF $11.92 -3.33%
EWW $51.25 -3.03%

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