A New Way To Invest in Chile

Chile has been one of my favorite investment destinations for a long time.

From the top down, the country has several things going for it. It is a commodity-based economy well known for its copper exports, strong GDP growth and a public pension system that provides ongoing demand for stocks. Moreover, only 15% of Chile's exports go to the U.S., so it has small exposure to a U.S. downturn.

There is a limited number of ways to make a concentrated bet on this market. Two years ago, I wrote about the (CH Quote)Chile Fund (CH), which is a closed-end fund. There are a few ADRs available, too. Finally, this month there is an ETF from Barclays, the iShares MSCI Chile Index Fund(ECH Quote).

I should note that inflation has been heating up lately, causing Chile's central bank to raise rates several times, contributing to the peso's appreciation against the U.S. dollar. That means the ETF's returns will look that much better when translated back into greenbacks. ...