Global X Andean Fund Could Be A Winner As MILA Exchange Debuts

As most Americans will be enjoying an extra day off and perhaps firing up their grills on Monday, things will be busy in South America's financial markets as the widely anticipated Mercados Integrados LatinoAmericanos exchange, or MILA, opens for business. MILA is a combination boerse that links the rapidly growing South American markets of Chile, Colombia and Peru. Upon its debut, MILA will be the second-largest Latin American boerse by market value, trailing only Brazil's Bovespa, that country's benchmark exchange. MILA's debut could also generate some enthusiasm for the Global X FTSE Andean 40 ETF AND, the first ETF offering multi-country exposure to Latin America without significant weights to Brazil and Mexico. In fact, as Benzinga noted on Thursday, AND is all about Chile (50.68%), Colombia (29.51%) and Peru (19.73%). AND has accumulated over $7.6 million in assets under management since its debut, not a bad start, but the ETF could be in the spotlight if MILA bolsters investor confidence and interest in the Andean region and serves to enhance liquidity among the region's equities. Combined, there are fewer than 15 Chilean, Colombian and Peruvian stocks trading in the U.S. and while investors could own the Global X FTSE Colombia 20 ETF GXG, the iShares MSCI Chile Investable Market Index Fund ECH and the iShares MSCI All Peru Capped Index Fund EPU to get exposure to most of the U.S.-listed Andean fare, AND is one stop-shopping for an investor's Andean needs. MILA will actually feature more listings, 560 to be precise, than any other LatAm exchange and daily trading volume should reach $300 million, according to MarketWatch. Familiar names to be listed on the exchange include Ecopetrol EC, Colombia's state-run oil producer, Peruvian mining giant Buenaventura BVN and Banco de Chile BCH. AND is heavy on materials and financial services names, but remember that Chile is viewed as somewhat of a defensive play among emerging markets. ECH devotes over 36% of its weight to utilities and consumer staples and the country will be the big kahuna on MILA as well, which could prove to be a point in AND's favor. Obviously, there is no track record to work with, but if MILA flourishes, AND's status as the only ETF focusing exclusively on the markets MILA represents should serve the ETF well.