ETFs For Peru's Election Results

After a heated battle between former/still sort of leftist and army rebel Ollanta Humala and Keiko Fujimori, the daughter of imprisoned former Peruvian President Alberto Fujimori, voters in the South American country went to the polls on Sunday electing Ollanta as their new president with 51.5% of the vote, according to exit polls.

The result is significant because outgoing President Alan Garcia Perez has fostered pro-growth policies in the same vain as recently departed Brazilian President Luiz Inacio Lula da Silva.

While Humala ran his most recent campaign with a less leftist tone than he did in the last election, which he lost, investors have nonetheless been fretting for months that Peruvian equities would sell-off following a Humala victory. After all, Fujimori was the candidate with a business degree from Columbia University. Humala is the one who is cozy with leftist dictators in the region.

Here are the ETFs that will be in play on the back of this election result.

1) iShares MSCI Peru All Capped Index Fund (NYSE: EPU): An obvious choice as the only Peru-specific ETF on the market, EPU has been all over the place in the past few months, almost functioning in its own election-related vacuum. EPU was a steady performer last year, in fact it was one of the best emerging markets ETFs out there, but after flirting with $50 earlier this year, the ETF tumbled all the way to the $37 neighborhood as polls indicated Humala was ahead. It would not be surprising to see EPU take a nasty tumble on Monday.

2) Global X FTSE Andean 40 ETF (NYSE: AND): We recently highlighted AND as the best ETF to play the new MILA exchange, which combines Chilean, Colombian and Peruvian equities on one boerse, but by virtue of that, AND also offers a weight of nearly 20% to Peru and could be for some for some near-term as result of Humala's win.

3) Global X Silver Miners ETF (NYSE: SIL): Sometimes, Peru is forgotten as one of the world's top producers of gold and silver, but country accounts for almost 4.5% of SIL's weight. Humala has previously threatened to revoke oil and minerals licenses in Peru, which could mean nationalization of those industries is on the way in Peru. This what happens when a country elects a guy who is chummy with Hugo Chavez.

4) Direxion Daily Latin America 3X Bear Shares (NYSE: LHB): LHB is definitely more a short-term trade on the back of a Humala victory. South America's other major economies, namely Brazil, Chile and Colombia have and continue to foster pro-growth environments. Even Argentina is trying to emulate the practice, so if Humala's win pressures LatAm ETFs at large, it should only be for a couple of days.

5) iShares MSCI Brazil Index Fund (NYSE: EWZ) and the Global X FTSE Colombia 20 ETF (NYSE: GXG): These two are bit of stretch, but only slightly so because as Bloomberg reported last week, Petrobras (NYSE: PBR) and Ecopetrol (NYSE: EC), the Brazilian and Colombian state-run oil producers, are looking to boost their Peruvian profiles this year as the country looks to increase its oil and natural gas production. Humala's threats to revoke mineral and oil rights in Peru, if they come to fruition, could severely hamper the country's energy sector. Petrobras and Ecopetrol account for significant chunks of EWZ and GXG.

6) Global X Fertilizers/Potash ETF (NYSE: SOIL): CF Industries (NYSE: CF) accounts for over 5% of SOIL's weight and the U.S. company has a $2 billion petrochemicals facility in Peru. A Humala victory could make that facility vulnerable to nationalization at some point.