Chile Has Outperformed Other Emerging Markets and the S&P 500 This Year. Here’s How (CNBC)

Our lists: Chile ADRs, Chile ETFs and Chile Closed-End Funds.

  • The iShares MSCI Chile exchange-traded fund (ECH) is up more than 3% year to date, while the U.S. benchmark S&P 500 is down more than 20% — officially trading in a bear market. There are several catalysts driving this outperformance, including the rejection of a proposed new constitution.
  • A look inside the ECH shows that an overweight allocation to commodities helped the ETF this year, even as rising interest rates dinged emerging markets across the board. As of October, materials stocks made up roughly 30% of the ECH ETF, which has 25 holdings. The top holding is Sociedad Quimica Y Minera De Chile.
  • “We think it’s like a stock picker’s dream market,” said Richard Cook, portfolio manager at Cook & Bynum Capital Management, calling it “a fantastic place for a good fundamental stock picker to be looking if they could get access.”
  • BCA Research’s Budaghyan said most of the rally is limited to large-cap stocks, likely driven by buying from foreign investors. READ MORE

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