Trouble Brewing for the Colombia ETF?
ETF Database submits: Thanks to ongoing turmoil in developed markets, many investors have put their dollars to work in emerging markets around the globe in an effort to generate material growth in their portfolios. Many ETFs have stepped up in recent years to give investors a variety of locales in which to invest, including funds targeting the Vietnamese, Peruvian, and Polish equity markets–just to name a few. While some have not been kind to investors, others have managed to produce incredible gains in a very short period of time, rewarding some investors for seeking out exposure to emerging and frontier economies that aren’t on the radar screens of most. One of the best performers in this category of country-specific emerging markets ETFs has been the Global X/InterBolsa FTSE Colombia ETF (GXG), which has surged by close to 50% on the year–including a 22% gain over the past three months. This amazing run has been fueled by stellar performances from some of the fund’s top holdings, including a 62% year to date gain from top holding Ecopetrol (EC) (20.3%) and a 40.9% gain from BanColombia (CIB) (19.9%). However, some are beginning to worry that the country could become the victim of its own success, as a rising Colombian peso threatens to choke off the impressive equity market rally.Complete Story »
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