Rainer Michael Preiss – Global Markets Commentary
March 2026 | Singapore
Long Colombia amid EPIC FURY
FREEDOM fighter Simon Bolivar created Colombia and smart money and private clients should look at Colombia equities and its largest listed oil company Ecopetrol amid EPIC fury and to make money and to further diversify global investment portfolios.
Colombia is one of the largest oil exporters in Latin America, making its equity market highly sensitive to global commodity cycles.
For private clients and family offices, the investment case for Colombia rests on three pillars: economic scale, natural resources, and under-owned capital markets.
For sophisticated private clients seeking diversification beyond crowded markets, Colombia represents a compelling but under-researched opportunity.
Colombia is the 38th largest economy in the world by nominal GDP and the 4th largest economy in Latin America.
Colombia is currently in the middle of a major election cycle in 2026, which will determine the country’s next president and the composition of Congress. The next presidential election will take place on 31 May 2026.
As of Friday, March 6 th , USA New York trading close, the Colombia country ETF Colo Global X MSCI Colombia ETF (COLO)closed at USD 36.60 and EC Ecopetrol closed at USD 12.92.
Colombia represents one of the most undervalued equity markets globally. Low foreign ownership, depressed valuations, and high dividend yields create a potential value opportunity for contrarian investors. The Global X MSCI Colombia ETF (COLO) offers diversified exposure to the Colombian market, while Ecopetrol serves as the country’s dominant energy champion and a key driver of equity performance.
Colombia Investment Thesis
- Deep Valuation Discount: Colombian equities trade at significantly lower valuation multiples than most global markets. Typical price‑to‑earnings ratios are in the range of 7–9x compared with 12–14x for emerging markets and more than 20x for the U.S. equity market.
- Commodity Exposure: Colombia’s economy is highly linked to commodity exports including oil, coal, and gold. When global commodity prices rise, corporate earnings and government revenues typically improve.
- High Dividend Culture: Latin American equity markets tend to distribute a larger share of profits to shareholders. Dividend yields in Colombia frequently range between 4% and 10%.
- Banking Sector Growth: The financial sector plays a dominant role in the Colombian equity market. Large institutions such as Bancolombia and Grupo Aval benefit from expanding credit markets and increasing financial inclusion.
- Low Foreign Investor Ownership: Global investors remain underweight Colombia relative to larger Latin American markets. If capital flows return, relatively small inflows could significantly re‑rate the market.
COLO ETF Overview
The Global X MSCI Colombia ETF (Ticker: COLO) tracks the MSCI All Colombia Select 25/50 Index and provides diversified exposure to Colombia’s largest publicly traded companies.
Typical sector exposure includes:
- Financials (banks)
- Energy
- Utilities and infrastructure
- Materials
Ecopetrol – The Core Colombian Energy Champion
Ecopetrol is Colombia’s largest company and a central pillar of the national economy. The firm operates as an integrated energy company covering exploration, production, refining, transportation pipelines, and power infrastructure.
Key characteristics:
- Majority owned by the Colombian government
- One of the largest oil producers in Latin America
- Major contributor to government revenues
- Core holding within the COLO ETF
Dividend Profile
Ecopetrol is known for exceptionally high dividend payouts. During periods of strong oil prices the dividend yield has exceeded 10%, reflecting strong cash flows and the government’s reliance on dividend income.
The Ecopetrol company is widely known among income investors for its unusually high dividend yield, which in certain periods has reached levels between 15% and 20%.
Ecopetrol’s high dividend yields and the associated opportunities and risks for investors.
- Oil Price Windfalls: Ecopetrol’s profitability is strongly linked to global oil prices. When crude prices rise significantly, company revenues and margins increase quickly. These strong cash flows allow the company to distribute larger dividends to shareholders.
- Government Ownership: The Colombian government owns approximately 85–90% of Ecopetrol. Because of this majority ownership, the government relies heavily on Ecopetrol dividends as a source of fiscal revenue. As a result, the company often distributes large portions of its profits to shareholders.
- High Dividend Payout Ratios: Ecopetrol frequently distributes between 60% and 90% of its net income as dividends. This payout ratio is significantly higher than many international oil companies.
Typical dividend yields for major oil companies:
- ExxonMobil: approximately 3–4%
- Chevron: approximately 3–4%
- Petrobras: approximately 10–15% during strong oil cycles
- Ecopetrol: approximately 8–20% depending on market conditions
- Share Price Volatility: Ecopetrol’s stock price can be volatile due to political risk, currency movements in the Colombian peso, and investor sentiment toward fossil fuel companies. When the share price declines while dividends remain high, the dividend yield can appear extremely elevated.
Example: Dividend Spike
During the oil price boom in 2022–2023, Ecopetrol generated significant profits and paid very large dividends. At times the dividend yield reached approximately 15–18%, making it one of the highest-yielding energy stocks in global equity markets.
Investment Risks
Very high dividend yields can indicate both opportunity and risk. Investors should consider the potential for dividend cuts if oil prices fall, the impact of government policy decisions, and currency volatility.
Portfolio Allocation Perspective
In a globally diversified portfolio, Colombia may serve as a tactical allocation to commodity cycles and emerging market value opportunities. Exposure can complement positions in Brazil, Mexico, and other emerging markets while providing high dividend income.
Key Investment Risks
- Political and regulatory uncertainty
- Currency volatility of the Colombian peso
- Commodity price fluctuations
- Lower liquidity compared with major global markets
Disclaimer
This document is for informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Investments involve risks, including possible loss of principal. Past performance does not guarantee future results. Investors should conduct their own due diligence and consult with professional advisers before making investment decisions. This commentary reflects general market views and is not tailored to the circumstances of any individual investor.
Rainer Michael Preiss, Partner & Portfolio Strategist DAS family Office, Singapore.
Rainer Michael Preiss
Partner & Portfolio Strategist — [email protected]
Rainer Michael Preiss is a German national and an investment advisor based in Singapore. He has over 25 years of experience in global private banking and multi-family office business across Europe, Middle East, Africa and Asia. Michael was previously the Chief Equity Strategist at Standard Chartered Bank (SCB) where he was one of seven voting members on the Global Investment Council which decided on SCB’s global investment policy. He is also a prolific and renowned contributor to the financial media world where he is a columnist for Forbes and is frequently featured on Bloomberg, CNA and CNBC.
