| Everyone's talking about China. Don't miss the | | | | 2004 and now 90% of Chile's exports to the US enter |
| opportunities in Chile. | | | | duty free. After a similar trade pact with South Korea |
| Yes. Chile with an "LE" not "NA" | | | | last year, exports rose 50%. |
| While the whole region is back in favor with investors, | | | | Current President Ricardo Lagos Escobar is under |
| it seems appropriate to highlight Chile which is the | | | | pressure to improve economic growth rates and bring |
| economic star of Latin America. | | | | down the stubbornly high 8% unemployment rate. On |
| Chile is about two times the size of Montana and has | | | | the positive side, inflation and interest rates are low at |
| an incredible coastline of 2,650 miles. While only 3% of | | | | 2-3%. Chile has demonstrated fiscal discipline and |
| its land is arable, it has an amazing variety of climates | | | | enjoys both a trade surplus and a budget surplus. |
| and rich agricultural production. It gained its | | | | How to Take Advantage |
| independence from Spain in 1810 and has 16 million | | | | There are no country- specific ETF's for Chile but |
| citizens of which 90% are Catholic. | | | | there is the Chile Fund (CH) which is a closed-end fund |
| The Chile story is somewhat similar to Ireland before | | | | managed by Credit Suisse Asset Management. It is up |
| its economic takeoff. From 1978 to 1988, per capita | | | | 53% over the past year, trades at a 7.7% discount to |
| income increased only $100 to reach $1,510. | | | | its net asset value and sports a 4.6% yield. Keep in |
| Next, both a military government followed by | | | | mind that 19% of the fund is invested in just one |
| democratically elected governments initiated market | | | | copper company Empresas Copec S.A. and the |
| reforms and opened up the economy. Exports and | | | | annual fee is high at 1.80%. |
| foreign investment took off and debt levels came | | | | Another alternative would be the iShares Latin |
| down. Foreign investors in Chile are treated the same | | | | America 40 (ILF) which invests in Mexico, Brazil, Chile |
| as Chilean investors. | | | | and Argentina. It is up an eye opening 67% over the |
| Chile's Take Off and Steady Growth | | | | past twelve months with an annual fee of only 0.55%. |
| From 1991-1998 economic growth increased an | | | | Currently, 49% of this exchange-traded fund is |
| average of 8% and per capita income on a purchasing | | | | invested in Brazil, 38% in Mexico, 10% in Chile and 3% |
| power basis has grown to $10,700. Since then growth | | | | in Argentina. |
| has moderated to a 4-5% range but a total Chilean | | | | Interested investors might also consider the ADR for |
| public and foreign debt at 50% of GDP is very low | | | | Banco Santander (SAN) which is an excellent bank |
| relative to other Latin countries. | | | | and a good proxy for the overall economy. It is up |
| Trade is very important to Chile with exports | | | | 42% over the past year and up 11% so far this year. |
| accounting for 25% of GDP. It is rich in natural | | | | Banco Santander is one of the 30 companies in the |
| resources (copper, timber, fruit and fish) and has been | | | | Chartwell Global 30 Index which is an alternative to the |
| busy signing free trade agreements. A Free Trade | | | | Dow Jones Industrial Average. |
| Agreement (FTA) with the US took effect in January | | | | |