As emerging markets power up for a run at 2007 highs, Colombia looks set to lead the way…and is drawing interest from two of Latin America’s wealthiest moguls, writes Todd Shriber in Global Profits Alert.

The good news for ETF investors is that one of their favored asset classes, emerging markets, has come roaring back in recent weeks.

Alright, so the performance to start this week hasn't been awe-inspiring—but take a look at the charts of the 2010 heroes among emerging-market ETFs, and it appears this group has been getting its act together. Perhaps these ETFs are setting up for a run back to their 2007 highs, as some analysts have predicted.

The story with many emerging markets is well-documented at this point. Brazil's is Latin America's economic titan. Russia is benefiting from soaring oil prices. China is, well, China.

That's all fine and dandy, but as we learned last year, it often pays to look at some of the emerging markets that are just starting to move into the limelight.

I'm going to tell you about one of those emerging markets and a couple of corresponding ETFs today. One that isn't yet as popular as the BRIC markets, but one that has all the pieces in place to continue outperforming BRIC.

That's right. I just said "continue outperforming BRIC" because that's what this ETF has done over the past two years, when measured against comparable ETFs tracking the BRIC countries.

What's the ETF and what's the country? Here are some clues that will lead you to the answer:

  • This is a country whose public image has changed significantly for the better over the last decade.
  • Once upon a time, it would have been fair to say that the export this country was most known for is illegal.
  • The country recently had its credit ratings raised.
  • It produced a record amount of oil in March.

Still don't know? This last clue could give it away: Carlos Slim, the world's richest man according to Forbes, is investing heavily here, as is Brazilian billionaire Eike Batista.

I'm talking about Colombia. If you don't believe me that the Global X FTSE Colombia 20 ETF (GXG) has outperformed the most popular ETFs tracking the BRIC quartet over the past two years, just take a look at the chart below.

chart
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So while everyone was lauding the iShares MSCI Brazil Index Fund (EWZ), it wasn't even the best performing ETF tracking a South American nation. And the spread by which GXG left the comparable China-specific ETFs in its dust is simply staggering.

Of course, I have to give you the disclaimer that past performance is no indicator of future returns, but I think the stars have aligned for more economic success for Colombia.

As I mentioned earlier, Colombia produced a record amount of oil in March (884,000 barrels per day), and the country is looking to almost double that total over the next decade. Guys like Carlos Slim and Eike Batista didn't become billionaires by making an array of losing investments.

In other words, they see potential in Colombia—and you should, too.GXG is one option to consider, and Market Vectors recently introduced the Market Vectors Colombia ETF (COLX).

You don't need both ETFs in your portfolio simultaneously, but I encourage you to consider one of them and head to the Global X and Market Vectors Web sites to research the differences between COLX and GXG.

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