Investors seeking momentum may have iShares MSCI Chile Capped ETF (WA:ECH) on radar now. The fund recently hit a new 52-week high. Shares of ECH are up approximately 43.9% from the 52-week low of $38.68/share.
But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.
ECH in Focus
ECH focuses on providing exposure to the Chile equity markets. It charges 62 basis points in fee per year. Utilities, Financials and Materials are the top three sectors of the fund, with 23.6%, 18.1%, and 15.2% allocation, respectively (as of Jan 18, 2018). It has top holdings in S.A.C.I. Falabella, Empresas Copec S.A. and Enel (MI:ENEI) Americas SA with 9.0%, 8.8%, and 7.9% allocation, respectively (as of Jan 18, 2018) (see all Latin American Equity ETFs here).
Why the Move?
The move can primarily be attributed to recent developments in the Chilean lithium and copper markets. Chilean state development agency Corfo entered into a deal with lithium miner SQM, ending a long dispute over royalties in Salar de Atacama, Chile’s largest salt flat. It allows the miner to expand production in case of high demand. Moreover, the Chilean government raised its forecast for the price of copper in 2018, its most important export.
More Gains Ahead?
Currently, ECH has a Zacks ETF Rank #3 (Hold) with a Medium Risk outlook. So it is difficult to get a handle on its future returns one way or another. However, it has an impressive weighted alpha of 45.00. So, there is definitely some promise for those who want to ride this surging ETF a little further.
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ISHARS-MSCI CHL (ECH): ETF Research Reports
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Zacks Investment Research