Peru ETF launched

iShares fund is commodity-focused

Jun 23, 2009 @ 2:12 pm

By Sue Asci

Barclays iShares yesterday launched the first ETF listed in the United States that is concentrated on markets in Peru.

The iShares MSCI All Peru Capped Index Fund (EPU) will track the MSCI All Peru Capped Index which holds the largest 25 equities.

The fund’s expense ratio is 0.63%.

“With the fastest growing economy in Latin America and one of the lowest inflation rates in the region, Peru’s essentially untapped market offers diversification and poses an attractive opportunity to investors,” Daniel Gamba, chief executive of Latin America for iShares, said in a statement.

“I believe it is the only Peruvian ETF,” said Scott Burns, an ETF analyst at Morningstar Inc. of Chicago.

“The Peruvian economy is pretty commodity-driven,” he said. “The single shared risk would be commodities. Also when you buy that country you get that country’s political and currency risk.”

Despite risk, single-country Latin America ETFs have successfully garnered assets, Mr. Burns said.

“The iShares ETFs are transparent, so investors always know exactly what the funds are holdings, and corresponding sector exposure,” wrote Dina Ting, iShares portfolio manager, in an e-mail.

In addition to the Peru ETF, iShares offers the MSCI Brazil Index Fund (EWZ), with $8.2 billion in assets, and the MSCI Mexico Investable Market Index Fund (EWW), with $541 million in assets as of June 22, according to Morningstar.

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