Little-known Peru ETF on top of the world, thanks to gold

The iShares MSCI All Peru Capped ETF (EPU) is up 30% on the year, making it the best-performing single country ETF of all 196 such funds in existence
MAR 29, 2016
No one is happier to see this year's rebound in precious metals than an obscure Peru exchange-traded fund. The iShares MSCI All Peru Capped ETF (EPU) is up 30% on the year, making it the best-performing single country ETF of all 196 such funds in existence. This is nothing short of a miraculous turnaround for an ETF that had lost 53% in the three years prior to 2016. EPU's breakout year is largely due to its high allocation to — and dependence on — mining companies. While Peru ranks No. 52 in terms of GDP, or just ahead of Romania, it punches way above its weight when it comes to the mining of precious metals, ranking sixth in gold and second in silver. As such, EPU has a freakish 50% of its portfolio allocated to the materials sector. For comparison, no other single country ETF has more than 30% allocated to the materials sector. The heavy weighting to miners has been a bad thing in the past, but when gold and silver are up 16% and 11%, respectively, so far this year, it is a very good thing. It doesn't hurt that emerging markets in general have been coming back from a multiyear slump; beating the U.S. stock market for the first time in a long time in the first quarter of this year. Peru is barely represented, however, in the most popular emerging-market ETFs, because the country remains tiny in market value, barely registering in the popular iShares MSCI Emerging Markets ETF (EEM), which weights stocks by market cap, with a 0.40% weighting. Even the MarketVectors Gold Miners ETF has only 1.5% exposure to Peruvian companies. Peru is one of a number of "lost countries" that are small fish in big ponds. Others include Greece in the emerging-market bucket and Ireland and Israel in developed markets. Such countries slip through the cracks and as such are not really inside most investors' portfolios. This probably explains why EPU has more than $166 million in assets — which includes $28 million in new cash this year–despite being such an obscure single-country ETF. Those investors know they can't get Peru anywhere else. EPU comes with an annual fee of 0.62%.

Latest News

Workers are financially drowning and retirement savings is a major red flag
Workers are financially drowning and retirement savings is a major red flag

Transamerica Institute survey reveals a stark divide between employer confidence and workers' financial reality.

SEC corporate enforcement hits multi-decade low as agency refocuses on fraud
SEC corporate enforcement hits multi-decade low as agency refocuses on fraud

Just five actions were started in the first half of fiscal 2026, a new analysis finds.

Beyond the Business: Why Advisors Must Help Owners Separate Wealth from Identity
Beyond the Business: Why Advisors Must Help Owners Separate Wealth from Identity

For business owners, the company is often more than an income source. It becomes their largest asset, their retirement plan, and in many cases, part of their identity. Advisors who understand that dynamics can deliver far greater value than traditional financial planning alone

Ex-Edward Jones advisor gets three-year prison sentence for stealing from widow
Ex-Edward Jones advisor gets three-year prison sentence for stealing from widow

John S. Winslow, 57, was indicted just over a year ago for his scheme to steal from an elderly client.

Vestmark, Hamachi push AI further for advisor portfolio intelligence
Vestmark, Hamachi push AI further for advisor portfolio intelligence

Hamachi's new model portfolio partnership and an industry-first solution from Vestmark join the growing wave of AI tools for wealth managers.

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

SPONSORED Durability over scale: What actually defines a great advisory firm

Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline