Colombia Etf: Why You Should Invest Now

Investing in Colombia ETFs provides access to a wide range of benefits. ETFs, or exchange-traded funds, are similar to traditional mutual funds in that they contain a diverse basket of assets, including stocks, bonds, and currencies. This allows investors to target specific strategies while reducing single-stock risk. Colombia ETFs offer efficient access to a broad basket of Colombian securities, providing exposure to companies with strong economic ties to the country. These ETFs are also known for their transparency, as most publish their holdings daily, and they are offered at lower expense ratios compared to mutual funds, resulting in lower and more predictable ownership costs. With over 2,000 ETFs listed in the U.S. alone, investors have a wide range of choices and flexibility when investing in this asset class.

Long-term growth potential

Colombia's economy is expected to grow in the long term, making it an attractive prospect for investors. While modest GDP growth is predicted for 2024, this could accelerate in 2025 if inflation is brought under control.

The Global X MSCI Colombia ETF (GXG) offers investors a chance to benefit from this growth by providing efficient access to a broad basket of Colombian securities. GXG invests in some of the largest and most liquid Colombian securities, including Bancolombia S.A. ADR and Ecopetrol S.A. ADR, which together carry a cumulative weighting of 27.54%.

The GXG ETF has a relatively narrow 52-week trading range between $9.33 and $11.51 and is currently trading at $10.92 as of June 2018. It has returned 8.98% year-to-date and pays a 1.76% dividend yield. The fund has an annual fee of 0.61%, which is slightly higher than the category average of 0.54%.

For investors seeking broader exposure to the South American economy, the iShares Latin America 40 ETF (ILF) offers access to 40 of the largest Latin American firms. This ETF has returned 3.46% over three years and has AUM of $1.37 billion, making it a much larger and more competitively priced fund than GXG, with an expense ratio of 0.49%.

Lower costs and predictable ownership

ETFs are offered at a lower expense ratio than comparable mutual funds. This means that shareholders can benefit from lower and more predictable ownership costs.

The Global X MSCI Colombia ETF (GXG) charges an annual fee of 0.61%, which is slightly higher than the category average of 0.54%. The iShares MSCI Colombia ETF (ICOL) has the same annual fee of 0.61%.

In comparison, the iShares Latin America 40 ETF (ILF) is more competitively priced, with an expense ratio of 0.49%.

ETFs are bought and sold on an exchange, similar to stocks, which provides investors with access to the market and their investments throughout the trading day. With more than 2,000 ETFs listed in the U.S. alone, investors have a wide range of choices and flexibility.

ETFs publish their holdings daily, so investors know what they own. This transparency can help investors make informed decisions and target specific themes or strategies while reducing single-stock risk.

Wide-ranging choice and flexibility

ETFs are bought and sold on an exchange, in a similar way to stocks. This provides investors with access to the market and their investments throughout the trading day. With more than 2,000 ETFs listed in the U.S. alone, this offers a wide range of choices and flexibility.

The ETF Country Exposure Tool allows investors to quickly look up equity ETFs that offer exposure to a specific country, such as Colombia.

There are several Colombia ETFs to choose from, including the Global X MSCI Colombia ETF (GXG) and the iShares MSCI Colombia ETF (ICOL). These ETFs provide exposure to companies with economic links to Colombia.

For investors seeking broader exposure to the South American economy, the iShares Latin America 40 ETF (ILF) offers access to 40 of the largest Latin American firms.

ETFs contain a basket of assets, including stocks, bonds, and currencies, allowing investors to target specific themes or strategies while reducing single-stock risk.

Most ETFs publish their holdings daily, so investors know what they own. ETFs are also offered at a lower expense ratio than comparable mutual funds, which likely means lower and more predictable ownership costs.

Daily published holdings

The Global X MSCI Colombia ETF (GXG) is a US-listed equity ETF that offers exposure to Colombian stocks. It was launched in 2009 and has a top-heavy portfolio, with its two leading holdings of Bancolombia S.A. ADR (NYSE: CIB) and Ecopetrol S.A. ADR (NYSE: EC) making up 27.54% of its portfolio. As of December 2024, its top holdings include Grupo de Inversiones Sura, GRUPO DE INV SURAMERICANA, and Grupo Argos SA/Colombia. The fund has a relatively narrow 52-week trading range between $9.33 and $11.51 and is currently trading at $10.92 as of June 2018. It returned 8.98% year-to-date (YTD) and pays a 1.76% dividend yield. GXG has an annual fee of 0.61%, which is slightly higher than the category average of 0.54%.

The iShares MSCI Colombia ETF (ICOL) was created in 2013 and has a heavily concentrated portfolio, with its top five holdings making up 42.58% of its portfolio. These include Ecopetrol, Bancolombia, Banco Davivienda S.A. (BVC: PFDAVVNDA), Interconnection Electric S.A. E.S.P. (OTC: IESFY), and Grupo Nutresa SA (OTC: GCHOY). The fund has a smaller net asset value of $23.74 million and the same annual fee of 0.61% as GXG. As of June 2018, the fund has a three-year annualized return of 2.68% and a one-year annualized return of 10.68%. It returned 7.92% YTD and offers a 1.4% dividend.

The iShares Latin America 40 ETF (ILF) is a broader South American fund that includes Colombian holdings. It was formed in 2001 and tracks the performance of the S&P Latin America 40 Index by investing primarily in securities that represent the underlying index. Its top 10 holdings have a cumulative weighting of over 50%, including Vale S.A. ADR (NYSE: VALE), Itau Unibanco Holding S.A. ADR (NYSE: ITUB), and Banco Bradesco S.A. ADR (NYSE: BBD). This ETF has a much larger AUM of $1.37 billion and a more competitive expense ratio of 0.49%. As of June 2018, it has returned 3.46% over the past three years but is down 9.72% YTD, making it a potential option for contrarian investors.

Access to a broad basket of Colombian securities

The Global X MSCI Colombia ETF (GXG) offers investors access to a broad basket of Colombian securities. This exchange-traded fund (ETF) seeks to provide investment results that correspond to the price and yield performance of the MSCI All Colombia Select 25/50 Index. The ETF targets exposure to a single country, Colombia, and delivers efficient access to a wide range of Colombian securities.

The GXG ETF invests in some of the largest and most liquid Colombian securities, including Grupo de Inversiones Sura, Grupo Argos SA/Colombia, and Ecopetrol S.A. ADR. The fund's portfolio is top-heavy, with its two leading holdings, Bancolombia S.A. ADR and Ecopetrol S.A. ADR, accounting for a significant percentage of its weightings. As of June 2018, the fund had a three-year annualized return of 2.68% and a one-year annualized return of 10.68%.

The GXG ETF provides a way for investors to gain exposure to the Colombian market and its growth potential. With an annual fee of 0.61%, it is slightly higher than the category average of 0.54%. The fund has a relatively narrow 52-week trading range between $9.33 and $11.51 and is currently trading at $10.92 as of June 2018. It has returned 8.98% year-to-date (YTD) and offers a 1.76% dividend yield.

Investing in the GXG ETF provides investors with a diversified approach to accessing the Colombian market, as it offers a basket of securities from various sectors, including communication services, real estate management, and telecommunication services. This diversification can help reduce the risk associated with investing in a single company or industry.

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