Updates on Foreign Closed-End Funds

CHILE FUND $21.02 (New York symbol CH) (CWA Rating: Aggressive) has net assets of $209.4 million U.S. It’s managed by Credit Suisse.

Prices for copper, a key commodity for Chile, are down from their highs, but still remain strong. Chile is a major exporter of copper, particularly to Asia. It’s the world’s biggest supplier of copper. Other important non-mineral exports are forestry and wood products, food and wine.

Top holdings are Compania de Petroleos de Chile (resources), 17.5%; Empresa Nacional de Electricidad (electric power), 14.7%; Empresas CMPC (pulp & paper), 12%; Enersis (electric power), 6.2%; Cencosud (retailing), 5%; Banco Santander Chile (banking), 4.9%; Vina Concha y Toro (wineries), 4.1%; SACI Falabella (retailing), 3.8%; Compania Cervecerias Unidas (beverages & food), 3.4%; and Banco de Credito e Inversiones (financial services), 2.9%.

The Chilean economy grew 6.3% in 2005, and 4% in 2006. Steady interest rate increases since 2004 have kept inflation at under 3%, but the rate increases, plus higher energy prices, slowed the economy in 2006. Even so, growth this year will still likely exceed 5.5%.

Chile Fund is up around 26% since the beginning of March. It now trades at a premium to net asset value of 2%. The outlook for the fund is positive, but no matter how appealing their area of investment, it only pays to buy closed-end funds when they are trading at a discount to asset value.

Chile Fund is a hold.

INDIA FUND $43.50 (New York symbol IFN; CWA Rating: Aggressive) invests mainly in largecapitalization Indian stocks. The manager of the fund is the Blackstone Group.

India Fund is being helped by strong growth in the Indian economy, and by relatively low inflation and interest rates. The government encourages foreign investment, and has boosted infrastructure spending and rural development, and cut taxes. India will likely report growth in its economy of 8.3% in 2006. Growth in 2007 is forecast at 7.3%.

India Fund’s top holdings are: Infosys Technologies (software) at 8.7%; Reliance Industries (conglomerate), 8.6%; Bharti AirTel (telecom), 5.8%; ICICI Bank (banking), 4.1%; Bharat Heavy Electricals (engineering & manufacturing), 3.9%; Oil & Natural Gas Corp., 3.8%; Housing Development Finance Corp. (finance), 3.2%; Reliance Communications (telecom), 3%; Tata Motors (autos), 2.7%; and Satyam Computer Services, 2.7%.

India’s economy is benefiting not only from rising exports and from providing global services such as outsourcing. It’s also responding to rising demand from consumers within the country. The fund trades at an 11% discount to the value of its assets.

India Fund is a buy for aggressive investors.