Latin American Funds

decrement

Hi all

I'm thinking of investing in some latin american funds for my shares isa and just wondering what thoughts people had on this region. There doesn't seem to be much focus on this area at the moment.

Im still young (30) so its for long term and to drip feed cash in on monthly basis focusng on growth over income.

Cheers

Jegersmart

Latin America is a big place, some different economies and markets for sure.

If we take the 3 major ones, Argentina, Brazil and Mexico - Mexico has way outperformed the others in the last 5 years - more or less rising like the S&P 500. Argentina had a serious wobble in 2011 and is now retesting the highs set in 2010 and the Bovespa in Brazil is in sideways-mode, lower highs but higher lows set over the past 2 years or so. The First State Latin America fund I have held for some time now has gained 14.xx% in the last 12 months but the difficulty I have with gauging this market is that it is so diverse, not only in economic strcture but also the transparency and accessibility of these different areas under the Latam "umbrella".

On reflection, I really need to do some more research on this area.

My own view is that this area along with other emerging markets will grow faster than the developed world in the longer term so I would definitely include this area in my own investments to some degree.

HTH

J

sabretoothtigger

Latin america, large parts of which speak Spanish has some link with companies based out of Spain. Thats useful because that can mean very cheap access from the west via relatively familiar companies

I dont know about tracking their own home grown small companies.
I have an emerging bond fund which sometimes buys debt here, I think Brazil levies a penalty as they fear outside cash raising their currency value

The biggest news now would be Venezuela as they have such large oil revenue I think their influence is disproportionate. Could be volatile but some might see this market unleashed like if Cuba wasn't communist anymore (though they matter less)

Ark_Welder

Latin American funds are usually almost exclusively invested in Brazil, Mexico and Chile, and usually in that order. So the prospects for these three countries will have a greater influence than those for the region as a whole.

If an emerging markets fund is already held then something else to watch out for is the company/country overlap, and whether holding a separate regional fund would add anything to that.

decrement

At the moment from my total portfoilio i have about 2% exposure. Really looking to up this to say 5-7%.

It is hard with this area knowing where to start even researching which funds are good. Everyone seems to concentrate on far east x japan at the moment.

jimjames

Possibly a good time to invest when the focus and spotlight is elsewhere. You don't want to invest after the herd have done so but get in before the rise happens.

I have Aberdeen Latin American and did have First State but had to sell when I switched platforms as it was no longer available on Cofunds.

Ark_Welder

decrement wrote: »

At the moment from my total portfoilio i have about 2% exposure. Really looking to up this to say 5-7%.

It is hard with this area knowing where to start even researching which funds are good. Everyone seems to concentrate on far east x japan at the moment.

What is it about the region that interests you? If you can decide on some specifics to that then you may be able to narrow down the number of funds by finding those where either the fund manager's outlook, or the investment mandate of the fund itself, matches your thinking.

N1AK

12% of my funds are South American (all Invesco Perp Latin America). It's one of the few developing world regions with tracker funds I'm interested in. I'm attracted to it by the comparative growth and stability; perhaps a decade ago I would have stayed out or tried to pick specific companies, but I think the continent as a whole is a viable option for index baskets now.

Borrowedtune

I've been keeping an eye on Aberdeen Latin American but I havent taken the plunge yet (I am trying to decrease the number of funds in my portfolio, so its a case of making a switch at some stage...)

I know Aberdeen have a research team based in Brazil - is the same true of First State ?

decrement

I think really i want to diversify my portfolio into other areas apart from UK/US/Asia.

As NIAK says its the potential growth opportunities and the fact that nobody seems to pay too much attention, so get in early before everyone else.

Thanks for the tips Borrowedtune & NIAK, i'll start looking at those two choices.