Africa/Latin America Index Funds

FUNDSS

Does anyone know any accessible Africa/Latin America Index Funds (I think growth in Africa especially will be phenomenal in the coming decades). I've had a quick look around but can't seem to find much success - finding funds for certain geographic regions is difficult. Alternatively, I would also be open to other long term growth funds people know about such as small-caps.

Alexland

Blackrock iShares have ETFs for South Africa and Latin America not that I have given them any consideration. The companies that might benefit from growth in those regions might not be listed locally but be global (US etc) listed companies. Generally it's hard to get adequate industry diversity from single region investing.

Linton

Blackrock Frontiers IT includes both Africa and Latin AMerica?   You may or may not be right about about Africa in the long term, but in the short/medium term you would have to be prepared for serious disappointments.

For small-caps I would go for managed funds rather than ETFs.  Trackers cannot cope with very small companies and you may find that what they call small companies may be surprisingly large.  The MSCI Global Small Company Index largest company would be at about position 80 in the FTSE100.

Thrugelmir

You'll probably find coverage within Emerging Market funds.  An experienced hands on active management team rather than passive investment. There's much to be avoided!

wmb194

Although it tends to be more managed than indexed, Latin America is fairly easy as there are a fair number of OEICs, ETFs e.g., iShares LTAM and Investment Trusts that cover Latin America e.g., BRLA, ALAI. 

Africa has always been harder as its stock markets and companies in general are underdeveloped. As Alexland says, you may need to look at companies in the West that will benefit tangentially e.g., Unilever, PZ Cussons, P&G, Vodafone (Vodacom) and the mining companies or, as Linton says, possibly ‘frontier’ funds. You’d need to look into their individual merits but having said this I can think of a couple of London listed pure plays on African telecoms ie. Africa Airtel (AAF) and Helios Towers (HTWS).

Old_Lifer

I have for many years held shares in 2 Latin American ITs  (Blackrock and Aberdeen).  Both are largely centred around Brazil which is the powerhouse of the region and are only partly equities.   As would be expected, the share price of both has fallen steeply recently and I would not expect to see any improvement for the forseeable future.   However, both are good dividend payers  and  I am content to  continue holding for the years ahead.    I have always taken a long term view  when investing and even at my age, old habits persist.

Africa is a different kettle of fish.    Yes , it has the potential for  huge profits but  it has even more potential for huge losses.   Corrupution is rife and levels of governance vary.    I seldom look at my main shareholdings nowadays  but  I have  several percent of my porfolio   in   a few small companies  which  I follow daily.    Late last year  I   bought shares in 2 African companies  which I have been following for  2 or 3 years.   The share prices of both are down  20-40 percent  in the last few weeks.  Since  the full impact of  the pandemic has yet  to reach Africa  I will not be adding to my holdings there anytime soon.   As is normal with new small companies,  the spectacular success of  the few   makes-up for the losses incurred by the many that fall by the wayside.

FUNDSS

Alexland said:

Blackrock iShares have ETFs for South Africa and Latin America not that I have given them any consideration. The companies that might benefit from growth in those regions might not be listed locally but be global (US etc) listed companies. Generally it's hard to get adequate industry diversity from single region investing.

I'm not a huge fan of ETFs. I see them as more of a secondary investment. I should add I have got two global funds (one lifestrategy, one with a few bonds excluding the UK). I also have an S&P 500 index that I may not keep after this is over. I was thinking it was a good to time to invest in Africa with the markets dipping. It has tons of resources, a huge growing population and politically will only surely develop. Better to catch the train early than miss out altogether. 

wmb194

FUNDSS said:

Alexland said:

Blackrock iShares have ETFs for South Africa and Latin America not that I have given them any consideration. The companies that might benefit from growth in those regions might not be listed locally but be global (US etc) listed companies. Generally it's hard to get adequate industry diversity from single region investing.

I'm not a huge fan of ETFs. I see them as more of a secondary investment. I should add I have got two global funds (one lifestrategy, one with a few bonds excluding the UK). I also have an S&P 500 index that I may not keep after this is over. I was thinking it was a good to time to invest in Africa with the markets dipping. It has tons of resources, a huge growing population and politically will only surely develop. Better to catch the train early than miss out altogether. 

To my certain knowledge people were saying the same twenty years ago and were probably saying the same twenty years before that and yet it generally goes nowhere, and I don’t think people expected South Africa to melt down in the way that it has. It has some fundamental problems. Telecoms there was definitely a very good investment for a while but the market is so competitive now the super-normal profits have been competed away. Mining is good for some but it’s not lumps of ore that drive your economy forward, it’s adding value by turning them into something useful and Africa’s been woefully bad at this. The countries with oil are wealthier but they seem to struggle to invest it wisely and diversify. Not to temper your enthusiasm and I could be hopelessly wrong but words like “surely” smack of hope over experience.