A Peru ETF On The Way

ETF Grind is reporting that the GlobalX FTSE Peru 20 ETF will soon be here. GlobalX brought a Columbia ETF recently with ticker GXG. The timing was fortuitous as the funds has gone straight up slightly outperforming the broader iShares Emerging Market ETF (NYSE: EEM).

Peru has a lot going for it in terms of being resource rich, not horribly managed by the government and it is, in a manner of speaking, an out of the way investment destination. If you invest at the country level you should probably learn the story.

From a big picture viewpoint this type of listing is important. It is likely that US based investors will need progressively more foreign exposure over the course of the next decade. I sat on a panel a few years ago at an ETF conference with someone from Turkey. During the Q&A I asked what a normal allocation to domestic equities was in Turkey (because of how volatile those equities are) and he answered 15-20%.

The US may be headed in the same direction but for a different reason, in Turkey’s case too much volatility and in the case of the US not enough growth. Many countries will grow and evolve even if the US does not. I believe realization of the possibility is crucial for investment results in the next decade. This has been important during this decade but will, IMO, be more so in the future.

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