Hispanic Stock Index

Instead of looking for the next hot stock, the next sure thing, why not throw some money into an index fund comprised of those companies that are already the number one providers of goods and services to the fastest growing segment of the population? Way back in August 2000 investment bank Samuel A. Ramirez & Co. put together a stock index to track the Hispanic market as an asset class. To qualify on the Hispanic Index, companies must have a majority of Hispanic owners or customers. Since its inception until early 2005, the Ramirez and Co. Hispanic Index (RCHI) was up 177%. Not bad at all when viewed against a 17% decline in the S&P for the same period.

HispanicBusiness.com has also put together its own Hispanic Business Stock Index (HBSI) to track heavily traded Hispanic companies in the U.S. It makes sense to track large Hispanic-oriented businesses as the Hispanic population in 2005 (last figures currently available) totalled more than 40 million, with a growth rate three times faster than the U.S. population as a whole. By 2010, total Hispanic disposable income is forecast to exceed $1 trillion. HBSI invests mainly in health-care, as well as financial and media companies whose primary customer base is Hispanics. There is considerable overlap between the two funds. HBSI limits its holdings to only US traded equities. RCHI includes several Puerto Rico-based companies.

The biggest holdings in the two portfolios include Univision Communications which reaches the homes of 98% of the U.S. Latino population, Hispanic Broadcasting Corporation, Entravision Communications and Spanish Broadcasting System. In the financial sector holdings include Popular Inc. (Banco Popular), International Bancshares Corp., United PanAm Financial and Metrocorp Bancshares, Inc.