New York-based Global X Management Company LLC announced yesterday that the first ETF investing exclusively in Peruvian companies will begin trading on the NYSE by the middle of June, according to a report from Bloomberg. Bruno del Ama, CEO of Global X explained the motivations for the fund, saying “the stock market has risen a lot, investors are bullish, and that’s helping us. We’re giving access to the Peruvian market and in the future people can go short in Peru, which is an option that doesn’t exist today.”
Peru’s Lima General Index is up 95% year-to-date, mostly on hopes that rebounds in commodity prices will drive growth in the resource-rich country. Of the 36 companies in the Index, 21 are resource companies, as Peru is the world’s largest miner of silver, fifth-largest miner of gold, and third-largest producer of copper, zinc, and tin. The Lima Index was down nearly 60% in 2008 as global commodity prices tumbled.
The new ETF will track the FTSE Peru 20, which includes companies such as:
- Maple Energy Plc: an oil and natural gas producer
- Austral Group SA: Peru’s largest fishmeal producer
- Cia. de Minas Buenaventura SA: Peru’s largest precious metals producer
Earlier this year, Global X launched the Global X/InterBolsa FTSE Colombia 20 ETF (GXG), the first exchange-traded fund offering exposure to the Colombian stock market. While the new Peruvian fund will be the first of its kind on the market, iShares is believed to be close to introducing a Peruvian market ETF to compete with Global X. iShares has several successful funds focused on South American and Latin American equity markets, including the MSCI Brazil Index Fund (EWZ) and the Latin America 40 Index Fund (ILF).