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EuroAmerica and MSCI to launch Chile ETF

EuroAmerica and MSCI to launch Chile ETF

Chilean asset manager EuroAmerica is launching an ETF that tracks the MSCI Small Cap Chile index amid a sustained local equities rally.

The ETF EuroAmerica MSCI Small Cap Chile is set to come out in mid-November, according to a statement by EuroAmerica announcing the launch.

EuroAmerica will make the ETF available to Chilean clients first, but it’s looking into offering it to clients in the rest of Latin America and in Europe, a spokesperson for the firm told Citywire Americas.

The launch occurs as Chilean small cap equities have returned 31.3% since January and 23.5% in 2016, according to the statement.

High copper prices and a strong Chilean peso have supported local equities this year, according to a recent research note by asset manager Credicorp Capital that also warned the remaining upside could be limited.

With the ETF, EuroAmerica said it is seeking to provide a low-cost, efficient solution as more investors entrust their advisors with their portfolio’s asset allocation.

‘Given that it is a passive strategy, ETF management fees are lower than for mutual funds or investment funds, which allows for lower implementation and maintenance costs,’ said Jorge Rivera, a EuroAmerica portfolio manager, according to the statement.

The firm claims this fund is the second ETF developed by a Chilean asset manager and the first to employ a Chile small cap strategy.

Itau Chile claims the first ETF of the Chilean market, the It Now IPSA, which according to an annual report had $100 million in assets as of the end of 2016.

EuroAmerica, which as of July ran about $1.1 billion, mostly targets retail clients but also caters to the institutional, private banking and wealth management segments. It specializes in managing Latin American assets, though it also invests globally.

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