Chile Leads the Latin Pack -

Home
>
Investing
>
Chile Leads the Latin Pack

Chile Leads the Latin Pack

Everyone's talking about China. Don't miss the opportunities in the other CHI..

Yes. Chile with an "LE" not "NA"

While the whole region is back in favor with investors, it seems appropriate to highlight Chile which is the economic star of Latin America.

Chile is about two times the size of Montana and has an incredible coastline of 2,650 miles. While only 3% of its land is arable, it has an amazing variety of climates and rich agricultural production. It gained its independence from Spain in 1810 and has 16 million citizens of which 90% are Catholic.

The Chile story is somewhat similar to Ireland before its economic takeoff. From 1978 to 1988, per capita income increased only $100 to reach $1,510.

Next, both a military government followed by democratically elected governments initiated market reforms and opened up the economy. Exports and foreign investment took off and debt levels came down. Foreign investors in Chile are treated the same as Chilean investors.

Chile's Take Off and Steady Growth

From 1991-1998 economic growth increased an average of 8% and per capita income on a purchasing power basis has grown to $10,700. Since then growth has moderated to a 4-5% range but a total Chilean public and foreign debt at 50% of GDP is very low relative to other Latin countries.

Trade is very important to Chile with exports accounting for 25% of GDP. It is rich in natural resources (copper, timber, fruit and fish) and has been busy signing free trade agreements. A Free Trade Agreement (FTA) with the US took effect in January 2004 and now 90% of Chile's exports to the US enter duty free. After a similar trade pact with South Korea last year, exports rose 50%.

Current President Ricardo Lagos Escobar is under pressure to improve economic growth rates and bring down the stubbornly high 8% unemployment rate. On the positive side, inflation and interest rates are low at 2-3%. Chile has demonstrated fiscal discipline and enjoys both a trade surplus and a budget surplus.

How to Take Advantage

There are no country- specific ETF's for Chile but there is the Chile Fund (CH) which is a closed-end fund managed by Credit Suisse Asset Management. It is up 53% over the past year, trades at a 7.7% discount to its net asset value and sports a 4.6% yield. Keep in mind that 19% of the fund is invested in just one copper company Empresas Copec S.A. and the annual fee is high at 1.80%.

Another alternative would be the iShares Latin America 40 (ILF) which invests in Mexico, Brazil, Chile and Argentina. It is up an eye opening 67% over the past twelve months with an annual fee of only 0.55%. Currently, 49% of this exchange-traded fund is invested in Brazil, 38% in Mexico, 10% in Chile and 3% in Argentina.

Interested investors might also consider the ADR for Banco Santander (SAN) which is an excellent bank and a good proxy for the overall economy. It is up 42% over the past year and up 11% so far this year. Banco Santander is one of the 30 companies in the Chartwell Global 30 Index which is an alternative to the Dow Jones Industrial Average.

About: Carl Delfeld is head of the global advisory firm Chartwell Partners and is editor of the "Chartwell Advisor" and the "Asia Investor Intelligence" newsletters. He served on the Executive Board of Directors of the Asian Development Bank in Manila and is the author of The New Global Investor (iUniverse: 2005). For more information go to http://www.chartwelladvisor.com or call 877-221-1496.

In The News:

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.business24-7.ae/Articles/2008/12/Pages/Chinareluctanttoinvestinforeignbanks.aspxcid=1277021301ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNHuPdH6AWmBgp9nPd9GRXlfdPcASwimg src=http://news.google.com/news?imgefp=C6yQqetq4_AJimgurl=www.business24-7.ae/SiteLists/ArticlesEditedPhotos112008/12_3_2008/ArtclDtaPg_5cf3e9b424f943da9fe52ac6812524e7_0.1.jpg width=80 height=51 alt= border=1brfont size=-2Emirates Business 24/7/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://online.wsj.com/article/SB122826930864174785.html%3Fmod%3Dgooglenews_wsjcid=1277021301ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNFsYIdX0ZvgCHv4ACFWu_8fj3Y3DQCIC Head Wary of bInvesting/b in Western Banks/abrfont size=-1font color=#6f6f6fWall Street Journalnbsp;-/font nobrDec 2, 2008/nobr/fontbrfont size=-1Lou Jiwei, who head#39;s China bInvestment/b Corp., said the uncertainty surrounding Western banks and the policy decisions that may determine their fate makes it b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.google.com/hostednews/afp/article/ALeqM5haP0592w0-kALVr8zJ57yL0SubKwcid=1277021301ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNGRKGpgxrhm7SXPY_rm8-BRdG1jqQChina#39;s sovereign wealth fund to avoid western financial firms: report/a font size=-1 color=#6f6f6fnobrAFP/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.reuters.com/article/mergersNews/idUSHKG4792720081203cid=1277021301ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNHTvKqBXmgvjYyOEt8cMZih3HkyjgUPDATE 1-China wealth fund lacks stomach for financial buys/a font size=-1 color=#6f6f6fnobrReuters/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.in-forum.com/ap/index.cfm%3Fpage%3Dview%26id%3DD94R1S8O0cid=1277021301ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNFp2yGXh_Op2p999BUFvDJA9X0pAQHead of China#39;s biggest government binvestment/b fund says not b.../b/a font size=-1 color=#6f6f6fnobrIn-Forum/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.google.com/hostednews/ap/article/ALeqM5gD9J9UD7Yp9X0GGbS9mE0jDvK3NAD94QV6782cid=1277021301ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNHv-E4ckq9-tBZLddHchr1fYGnceQnobrThe Associated Press/nobr/anbsp;- a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.chinaknowledge.com/News/news-detail.aspx%3Fid%3D19422%26cat%3DFNDcid=1277021301ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNHT2hl3BxAaLEooSzTu0I7INHpb-QnobrChina Knowledge Online/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1277021301hl=ennobrall 255 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.usnews.com/articles/business/investing/2008/12/02/etf-investing-5-pitfalls-to-avoid.htmlcid=1277290786ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNFIHteQBKM4TW1H__bfza3FzAce_QETF bInvesting/b: 5 Pitfalls to Avoid/abrfont size=-1font color=#6f6f6fU.S. News World Report,nbsp;DCnbsp;-/font nobr6 hours ago/nobr/fontbrfont size=-1By Kirk Shinkle Security, transparency, low costs: It#39;s the mantra of the exchange-traded fund industry, and by and large, most ETFs do live up to the b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.usnews.com/articles/business/investing/2008/12/03/building-a-portfolio-using-etfs.htmlcid=1277290786ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNFl9SjLaEExlxjz1wZJPcNxvgjU9ABuilding a Portfolio Using ETFs/a font size=-1 color=#6f6f6fnobrU.S. News World Report/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1277290786hl=ennobrall 5 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.google.com/hostednews/afp/article/ALeqM5i26BE7fXAtVAaZ7b4XFXVDycCiNQcid=1274822976ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNEnr06Is9IZCp5NOrHtdS0L659JGQimg src=http://news.google.com/news?imgefp=8Okj0ZM7Ye0Jimgurl=www.google.com/hostednews/afp/media/ALeqM5iSKq-w0uafZ9QVjddwuvI3NWYVvg width=80 height=53 alt= border=1brfont size=-2AFP/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://seekingalpha.com/article/108954-recessions-are-perfect-for-currency-investingcid=1274822976ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNEYLV6dB9zQC1IhQlDr51sAGweH1wRecessions Are Perfect for Currency bInvesting/b/abrfont size=-1font color=#6f6f6fSeeking Alpha,nbsp;NYnbsp;-/font nobr17 hours ago/nobr/fontbrfont size=-1One thing that I love about the currency market is that there is always a currency or two going up at all times, even when stocks and commodities are b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.bloomberg.com/apps/news%3Fpid%3D20601087%26sid%3DaOv7gMbqGRXE%26refer%3Dhomecid=1274822976ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNGDEqG5NkoZNvE9-dKWJqo7QdZBNwYen Gains on Concern Recession Will Spur Repatriation of Funds/a font size=-1 color=#6f6f6fnobrBloomberg/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.forexhound.com/article.cfm%3FarticleID%3D119359cid=1274822976ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNE-HKez9WW2UY2GOvygjC22CdsX6AMarket Overview by Forex Yard/a font size=-1 color=#6f6f6fnobrForex Hound/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.forexfactory.com/news.php%3Fdo%3Dnews%26id%3D132147cid=1274822976ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNEqT_pH5rx3GrB8oXo_aKlGtfQ10gWeekly Forex Wrap-up/a font size=-1 color=#6f6f6fnobrForex Factory/nobr/font/fontbrfont size=-1 class=pa href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.istockanalyst.com/article/viewarticle%2Barticleid_2840959.htmlcid=1274822976ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNGHGLISL8usg9x_0mPG_o-23iM6qgnobristockAnalyst.com (press release)/nobr/a/fontbr/font class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1274822976hl=ennobrall 469 news articles/nobr/a/font/div/font/td/tr/table

table border=0 width= valign=top cellpadding=2 cellspacing=7trtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbrdiv style=padding-top:0.8em;img alt= height=1 width=1/divdiv class=lha href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.marketwatch.com/news/story/Research-Markets-Wall-Streets-Buried/story.aspx%3Fguid%3D%257B6DF42620-8A22-4060-AFAB-9746E61CF9C9%257Dcid=1276921655ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNHqox9-0KgVxQAJXFeKTyN560HPhgResearch and Markets: Wall Street#39;s Buried Treasure: The Low b.../b/abrfont size=-1font color=#6f6f6fMarketWatchnbsp;-/font nobrDec 2, 2008/nobr/fontbrfont size=-1BILL KRAFT, trader, speaker, trading coach, and author of Trade Your Way to Wealth quot;bInvesting/b without Wall Street#39;s Buried Treasure is like trying to live b.../b/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.usnews.com/blogs/new-money/2008/12/03/a-blitz-of-funds-reopen-for-business.htmlcid=1276921655ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNFDdRU9C-G-ZX413zWghZQloHxh-gA Blitz of Funds Reopen for Business/a font size=-1 color=#6f6f6fnobrU.S. News World Report/nobr/font/fontbrfont size=-1a href=http://www.citywebshopper.net/articles/includes/redirect.php?url=http://www.bloomberg.com/apps/news%3Fpid%3D20601087%26sid%3Da_3sKuDYazdE%26refer%3Dhomecid=1276921655ei=6Gs3Sb6PCJXM8ATa-PSxDwusg=AFQjCNFE3rx-R9cO32c642Sa3LfJx3rVaAFidelity to Open Contrafund, Low-Priced Stock Fund (Update1)/a font size=-1 color=#6f6f6fnobrBloomberg/nobr/font/fontbrfont class=p size=-1a class=p href=http://news.google.com/news?sourceid=navclientie=ISO-8859-1rls=GGLG,GGLG:2005-22,GGLG:enncl=1276921655hl=ennobrall 48 news articles/nobr/a/font/div/font/td/tr/table

investing - Google News