Global X MSCI Colombia ETF Holdings (October 2024)
Colombia stock pick holdings of the Global X MSCI Colombia ETF (NYSEARCA: GXG) plus some economic data. Colombia is far removed from big geopolitical conflicts, but has a leftist president.
With continued geopolitical conflicts, it’s worth revisiting the Colombia ETF and all of its holdings (some of which might be a better way to gain exposure to the country) given how the country is far removed from current international conflicts:
Global X MSCI Colombia ETF (NYSEARCA: GXG)
P/E: 5.70 / Yield: 6.72% (Yahoo! Finance)
Last October, I covered the ETF’s holdings (Global X MSCI Colombia ETF Holdings (September 2023) - when the ETF had a P/E of 5.03 and a yield of 6.75%) and noted that Brazil’s Lula had surprised the market by not being as bad as expected (as he is checked by a right leaning Congress), but it was Colombia under the also recently elected (and former communist guerrilla) Gustavo Petro that had investors more concerned.
Our October 3rd 2023 post noted a podcast where a fund manager explained how investors always hope a moderate centralist right candidate will emerge from elections. But he also explained why this may not matter much. For example: Bolsonaro may have said controversial things; but he allowed his finance minister to manage the economy, the Central bank remained independent, etc. Lula had also appointed a pragmatic rather than a political finance minister. In other words, what ultimately matters are fiscally responsible policies and the central bank being free to do its job as that will remove or lower country risk premiums.
However and earlier in 2023, Colombia’s Petro removed the majority of his cabinet - including the orthodox Finance Minister who was the last point of trust and stability from the market’s perspective:
📰 Colombia’s President Replaces Market-Friendly Finance Minister in Cabinet Reshuffle (WSJ) $ 🗃️ April 2023
The changes come in the wake of the breakup of his governing coalition and prompt the peso to weaken
Petro is roughly halfway through his term and things are getting more interesting for him, Colombia, and foreign investors:
📰 Colombia leader plans to pass budget by decree (FT) $ 🗃️ October 2024
Colombia’s president Gustavo Petro plans to issue the national budget by decree after lawmakers refused his proposed spending increases, his finance minister said — a move unprecedented since the current constitution was enacted more than three decades ago.
📰 With One Dead Already, Widening Corruption Scandal Threatens Petro’s Presidency (Finance Colombia) October 2024
This scandal exposed a whole criminal operation orchestrated by those involved to loot the entity’s resources, though bag-man Olmedo Lopez insists that President Gustavo Petro was unaware of the massive scheme involving multiple segments of his administration.
📰 ‘Coup has begun’: Colombia’s President Petro faces campaign election probe (Al Jazeera) October 2024
Colombia’s first leftist leader says the investigation into his 2022 campaign finances seeks to unseat him from power.
With that said, here is a look at some key Colombian economic data during Petro’s over the last few years:
Here is a look at the more recent performance of the Colombia ETF covering the COVID period until today (the charts are linked back to Yahoo! Finance):
And the long term performance chart:
Investors looking at the Colombia ETF should be aware of a couple of potential issues that I also noted last year:
The Colombia ETF is still heavily invested in financials, energy and utilities - sectors that have been or could still be targeted by left-leaning Petro.
Several of the Colombia ETF’s holdings are actually cross holdings e.g. subsidiaries of or conglomerates. Investors will need to be aware of the shareholding structure of each entity closely.
Several of the Colombia ETF’s holdings appear to have significant if not most of their exposure to other Latin American countries or the USA rather than Colombia. Again, investors will need to look at each stock more closely to determine where revenues, earnings, and risk are coming from.
Some of the Colombia ETF’s holdings are actually the stock’s preferred shares.
Keeping the above in mind, I would not conclude the ETF is flawed and it does offer good exposure to Latin America. Investors looking for more direct or (for that matter) less exposure to Colombia might be better off taking a closer look at some of the individual stock holdings - some of which do trade on USA stock exchanges.
We also have a Colombia ADRs page on our website with more Colombian stocks and investing resources while here are some other Colombian focused stocks we have covered in the past:
GeoPark Ltd (NYSE: GPRK): Positioned for a Latin American Oil Boom
Tecnoglass (NYSE: TGLS): An Architectural Glass Stock With an Unbreakable Recent Performance
To make your life easier, this post has a much shorter description (from our North & Latin America Stock Index) than past posts to make the whole post easier to skim through (an autogenerated Substack table of contents with the names of each stock holding will appear as small lines on the left side of desktop browsers) and includes:
🌐🌏 etc. This is fairly subjective as, for example, many stocks are part of global supply chains rather than purely domestic companies.
🏛️ State owned, controlled, or influenced companies.
👼🏻 ESG friendly stock e.g. renewable energy. This is fairly subjective.
🅿️ Preference shares available (Note: I don’t see a comprehensive list of preference shares or preferred stocks readily available on the Internet…).
A very short description of the stock with links to the IR page and stock quote(s) on Yahoo! Finance or other sites.
Any Wikipedia page (denoted by 🇼) and a Substack stock tag link (denoted by 🏷️) linked to any post under EM Stock Pick Tear Sheets.
A price/book (most recent quarter) ratio plus forward or trailing P/E and dividend yields linked back to the Yahoo! Finance statistics page.
The latest long term technical chart linked back to Yahoo! Finance.
And as always, this post is provided for informational purposes only (and to make your life easier by providing you with relevant information, links, and charts). It does not constitute investment advice and/or a recommendation…
Banco Davivienda SA
🌎🅿️ Banco Davivienda SA (BVC: PFDAVVNDA.CL) - Regional bank leader (Colombia, Panama, Costa Rica, El Salvador, Honduras & USA). 🇼 🏷️
Price/Book (Most Recent Quarter): 4.91
Forward P/E: 0.62 / Forward Annual Dividend Yield: 5.67% (Yahoo! Finance)
Bancolombia
🌎🅿️ Bancolombia (NYSE: CIB / BVC: PFBCOLOM) - First Colombian financial institution listed on the NYSE. It provides banking products & services in Colombia, Panama, Puerto Rico, El Salvador, Bermuda & Guatemala. 🇼 🏷️
Price/Book (Most Recent Quarter): 5.55
Forward P/E: 0.82 / Forward Annual Dividend Yield: 10.37% (Yahoo! Finance)
Price/Book (Most Recent Quarter): 0.85
Forward P/E: 5.73 / Forward Annual Dividend Yield: 10.18% (Yahoo! Finance)
Brookfield Renewable Corp
🌐👼🏻 Brookfield Renewable - Operates one of the world’s largest publicly traded platforms for renewable power & decarbonization solutions. Brookfield Renewable Partners L.P. (NYSE: BEP) (Bermuda -based limited partnership) or Brookfield Renewable Corporation (NYSE: BEPC). 🇼 🏷️
Price/Book (Most Recent Quarter): 1.11
Forward P/E: 16.58 / Forward Annual Dividend Yield: 4.14% (Yahoo! Finance)
