Chile has reformed its markets as well as any emerging nation. From its days as a despotic military-ruled basket case in the 1970s and ’80s, Chile has emerged as a small but stable player in South America. Inflation, once rampant, is under control. A pro-business government has paved the way for strong commercial enterprise in this resource-rich country. But Chile is a one-horse town when it comes to investing.

Granted, it has the usual commercial enterprises such as banks, retailers, airlines, and tourism. But, it’s a small country and its biggest asset by far is its natural resources, specifically copper. Revenues from copper make up fully one-third of the government’s revenue and with the boom in global construction in the 2000 to 2007 period, Chile was in the sweet spot. Even today, with copper trading at levels well above those in the 1990s, Chile has shown 5 percent-plus GDP growth—amazing considering the major earthquake/tsunami that struck the country in 2010.

Known for a stable banking system and sporting South America’s top sovereign debt rating, Chile has been able to balance its economic system through its rainy day fund, something rare in emerging markets of any size. The country maintains a sovereign wealth fund that has over $20 billion in assets, and the country continues to add to this investment fund in times when copper prices are high. When demand drops or during times of recession, the fund’s capital, which ...

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