Why they may be an unexpected winner of the AI boom, Iran war

AI Boom and Geopolitical Tensions Open New Investment Opportunities in Emerging Markets

Imagine if you found a hidden treasure chest while everyone else was looking in the same old places. That’s what’s happening with Peru’s stock market right now, and it could mean big things for investors.

Why Peru’s Stock Market Is Making Headlines

While many global stock markets are struggling or just moving a little, Peru’s market is racing ahead. In 2026, the S&P Peru Total Index went up 23%, and over the past year, it’s soared more than 75%. That’s much better than the S&P 500 in the U.S., which actually dropped 2% this year and only went up 19% in the last year. Even the MSCI Emerging Markets index, which tracks fast-growing countries, only grew 4% this year and 30% over 12 months.

This big jump in Peru’s market is mostly because of two things: gold and copper. These metals are in high demand as the world builds more technology like artificial intelligence (AI) data centers and as people look for safe places to put their money during uncertain times. Investors can also buy into Peru’s market through an ETF called EPU, which is up more than 13% this year.

What’s Fueling the Boom?

  • Commodities Power: Peru is a top source for copper and gold. Copper is needed for building data centers that run AI and for making electric grids stronger. Over the next decade, more than 3,200 data centers are expected to be built worldwide (ABI Research).
  • Rising Prices: Copper prices have jumped 20% in the past year. Gold, too, is up a massive 81%, and silver has skyrocketed 176%. Peru has nearly 4% of the world’s gold reserves and over 21% of its silver, according to EY.
  • Political Changes: Peru is expected to get a more market-friendly government soon. Experts believe this could boost business confidence and bring more investment into the country.

Bull Case: Why Investors Are Excited

  • Strong Exports: From January to October 2025, Peru’s exports grew almost 25% compared to the year before, hitting nearly $50 billion. This is a big deal for the country’s economy.
  • Global Demand: As the world moves toward more technology and electrification, copper and gold from Peru are needed more than ever.
  • Safe Haven: With wars and global conflicts, more people are buying gold and silver to protect their money, which helps Peru’s miners.
  • Diversification: Investors are looking for new places to put their money outside the usual big markets, especially as risks rise elsewhere. This could bring even more cash to Peru and other Latin American countries.
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Bear Case: What Could Go Wrong?

  • Political Risks: Peru’s history of government changes can make investors nervous. If the expected pro-market government doesn’t deliver, confidence could fall.
  • Oil Prices: Peru imports oil, so if prices keep rising due to conflicts like the Iran war (oil recently hit $110 a barrel), it could hurt the economy. However, higher metal prices might help balance this out.
  • Commodity Swings: If copper or gold prices drop suddenly, Peru’s market could tumble too. These markets can be very unpredictable.

Historical Context: Is This Normal?

Peru has had booms before, often tied to metal prices. For example, in the early 2000s, as China grew fast, Peru’s copper exports helped its stock market rise. But when metal prices fall, Peru’s market can drop quickly. In fact, a study by the IMF found that commodity price swings explain a lot of the ups and downs in Latin American economies.

How to Invest in Peru

  • ETFs: The EPU ETF is one easy way to invest. It has outperformed the broader emerging markets ETF (EEM) most years recently, but it charges a 0.59% fee.
  • Stocks: Some U.S.-listed companies in the fund include Credicorp (up nearly 15% this year) and Compania de Minas Buenaventura (up 28%), which mines gold and silver.

Investor Takeaway

  • Keep an eye on Peru if you want to diversify your portfolio, especially if you believe in the long-term demand for metals like copper and gold.
  • Consider using ETFs like EPU for easy access, but remember the risks of investing in emerging markets and commodities.
  • Watch political changes in Peru closely, as they can quickly change the outlook for investors.
  • Remember that big gains often come with big risks. Don’t put all your eggs in one basket—spread your investments out.
  • Stay updated on global events, especially conflicts that can affect oil and metal prices, as these will impact Peru’s market.

For the full original report, see CNBC

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