Peru comes with political risks, big potential

Article Excerpt

Peru is best known for its stunning mountain landscapes, llamas, and the famous Machu Picchu, one of the new “seven wonders of the world.” But the country is also a major producer of commodities such as copper and silver and various agricultural products. ISHARES MSCI PERU ETF $28.17 (New York symbol EPU; TSINetwork ETF Rating: Aggressive; Market cap: $120.4 million) tracks the performance of a broad basket of publicly listed Peruvian companies. The fund is priced in U.S. dollars and the underlying exposure to the Peruvian sol is not hedged. The ETF holds a portfolio of 25 stocks although it is heavily concentrated in the top 10—they make up 74% of the fund’s total assets. Mining (50%), Financials (27%), Consumer Defensive (6%), and Industrials (6%) are the main segments represented in the portfolio. The fund’s top holdings include Credicorp (Financials, 22.9%), Southern Copper (Mining, 20.1%), Buenaventura Mining (Mining, 5.7%), Alicorp (Consumer defensive, 4.6%), Ferreycorp SAA (Industrials, 4.4%), Sociedad Minera Cerro Verde (Mining, 4.1%), Unacem Corp…