Summary
EPU Chart
EPU: A Mining ETF With A Large-Cap Bank
The iShares MSCI Peru ETF (EPU) has surged 69.1% YTD, earning a Strong Buy Quant Rating and ranking as the top single country ETF for 2025. EPU's outperformance is driven by strong returns from a concentrated set of holdings and sector exposure. The fund's narrow focus presents significant vulnerability and concentration risk for future performance.
EPU: Peru Isn't One Of My Top LatAm Picks Right Now
Latin American equities have outperformed the U.S. market in 2025, and Peru is among those winners year-to-date. Peru's political instability and upcoming elections present significant risks, particularly when compared to other countries in the region. EPU's mining focus benefits from high commodity prices, but the lack of diversification will be a drag if metals prices slide.
EPU: Interesting Investment At Low Diversification And High Risk
Peru offers an attractive investment opportunity with low debt, low valuations, and strong economic growth, despite high risk. iShares MSCI Peru ETF focuses heavily on Basic Materials and Financials, making it a sector play with high volatility. Peru's healthy economy, low inflation, and strong GDP growth, coupled with rising copper demand, support EPU's potential.
iShares MSCI Peru and Global Exposure ETF (EPU) FAQ
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iShares MSCI Peru and Global Exposure ETF Profile
| ARCA Exchange | US Country |
Overview
The fund is designed to offer investors exposure to a specific portion of the market, which consists predominantly of companies within the financials and materials industries or sectors. This focus is particularly on businesses that have a significant economic connection to Peru, including but not limited to, companies that are organized, listed, or maintain a substantial part of their operations in developed countries outside of Peru. It adheres to a strategy of investing at least 80% of its assets in securities that are part of its target index or those with economic characteristics nearly identical to the index components. Although the fund aims to mirror the performance of its index closely, it is categorized as non-diversified. This means it may invest more heavily in a smaller number of securities or sectors, potentially increasing the fund's risk compared to diversified funds.
Products and Services
- Investment in Component Securities of the Index
The fund commits a significant part of its assets, at least 80%, to the securities that form the index it tracks. This strategy is designed to mimic the performance of the index, thereby aligning the fund's returns with the broader market movements of its focus area.
- Investments with Economic Characteristics Identical to the Index
In addition to direct investments in the index components, the fund also seeks opportunities in investments that offer substantially the same economic characteristics as those in the index. These can include derivatives or other financial instruments that mimic the performance of the index components.
- Focus on Financials and Materials Industries
A significant portion of the index, and thus the fund's investments, is constituted by companies operating within the financials and materials sectors. This focus is reflective of the fund's strategy to tap into the potentially lucrative returns these industries offer, especially in relation to Peru's economic landscape.
- Exposure to Peru and Developed Countries
This fund is distinctive in its strategy to invest in companies with a substantial economic exposure to Peru. It not only includes Peruvian companies but also those situated or listed in developed countries with significant operations or business interests in Peru. This approach allows for a more diversified geographical exposure within the targeted industries.
- Non-Diversified Fund Structure
As a non-diversified fund, it invests more heavily in a smaller number of securities or sectors compared to diversified funds. This concentration can lead to increased volatility or risk; however, it also offers the potential for higher returns, making it an attractive option for certain investors willing to accept higher levels of risk.
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