Thanks to ongoing crises in Europe, investors are finally shifting their focus from the crisis-ridden developed economies to the emerging Latin American countries. One such country which is drawing investor attention is Colombia – the fourth largest economy in Latin America.

colombian_flagThe Colombian economy has nicely held up over the last several years thanks to improved security conditions, political stability and a record level of foreign investment into its oil and coal sectors. The uptick is expected to continue this year as well.

According to the International Monetary Fund (IMF), Colombia is expected to grow 4.4% in 2013, well ahead of many other nations in the region. Positive demographics with a population of nearly 47 million, strong macroeconomic policy framework and a flexible exchange rate regime will fuel further growth in the country.

Growing consumer demand in the country had resulted in a rise in inflation to well above the midpoint of the central bank’s target range (though among the lowest in the region), leading to rate hikes in 2011 and 2012. However, the inflationary pressures have now started easing and inflation currently stands at 2%.

The country’s key exports of oil, coffee and coal industrial production have suffered of late due to global slowdown and strong appreciation of the currency. With both the government and central bank purchasing dollars to limit the currency appreciation, the Colombian peso now seems to have stabilized to some extent (read: Best Latin America ETFs for 2013 (Part II): Colombia).

In spite of all the progress, unemployment rate of about 10% is the major concern for the nation’s growth. Though the rate has fallen from nearly 15% about a decade ago, it is still among the highest in the region.

Beyond this, poor infrastructure, income inequality and drug-related violence remain the main challenges for the country. Further, the economy is highly dependent on the performance of the volatile oil and mining sectors.

Notwithstanding somewhat high levels of uncertainty, Colombia still holds the “investment grade” rating from all the three top agencies owing to its improved investment environment. The future economic and business prospects in Colombia seem promising on the back of worldwide efforts by both its government and central bank (read: 4 Best ETF Strategies for 2013).

Having said that, a look at the top ranked Colombian ETF could be a great way for investors to tap this emerging Latin American market. One way to find a top ranked ETF in this space is by using the Zacks ETF Ranking system, a technique that provides a recommendation for the ETF in the context of our outlook of the underlying industry, sector, style box or asset class. Their proprietary methodology also takes into account the risk preferences of investors.