Alternative Incomes – Latin Investments

by | Jan 3, 2012 | Archives

Here are alternative incomes in Latin investments.

Latin America is a great place of growth even in these difficult times. We especially love Ecuador but often repeat a warning that Ecuador is a great place to live… but not to invest in bonds or shares.

Latin America offers some great investing potential but one is better to enjoy the low cost friendly easy life in Ecuador and hold assets in other parts of  Latin America.
Latin America is an emerging market region to invest in and there are various exchange traded funds (ETFs) that make it easy to do so via an account held in Panama, Europe or the USA.

Keppler Asset Management ranks Brazil as one of the good value emerging markets (buy). Colombia, Mexico and Peru are ranked neutral, but  Chile however is on Keppler’s sell (poor value) list.

You can invest in Brazil through the iShares MSCI Brazil Index Fund (NYSEArca: EWZ). The chart below from shows that this ETF has enjoyed great performance but suffered in 2011 dropping from nearly $80 a share to $55.

latin charts

Much of this loss however is due to the rising US dollar from 1.50 real to 1.87 real per US dollar.

This rise in the greenback is not supported by fundamentals such as debt, deficit and trade balance so this adds even more potential to that investment now.

iShares MSCI Mexico (NYSEArca: EWW) is down as well from $64 to $54, but also has enjoyed excellent long term growth as this chart shows..

latin charts

Peru’s economy has one of the highest growth rates in Latin America. Likewise, iShares MSCI Peru (NYSEArca: EPU) was up 53% in 2010 but then dropped from $50 to $39 per share  in 2011. Investors should watch how the mining or oil projects are doing there to determine the potential in the Peruvian market.

There has been strong economic growth in Paraguay, Uruguay, Peru, Argentina, Brazil, Chile and Mexico and if you are looking for broad exposure to Latin America, check out SPDR S&P Emerging Latin America (NYSEArca: GML) or iShares S&P Latin America 40 Index (NYSEArca: ILF).

The SPDR S&P Emerging Latin America seeks to replicate, net of expenses, the S&P Latin America BMI index which is a market capitalization weighted index that measures the investable universe of publicly traded companies domiciled in emerging Latin America markets.

iShares S&P Latin America 40 Index seeks returns that correspond to the S&P Latin America 40 IndexTM.

The S&P Latin America BMI is a subset of the S&P Global BMI, S&P Indices’ leading global markets index. The S&P Latin America BMI is designed to provide a comprehensive benchmark to investors and is segmented by country/region, size (large, mid, small), GICS® (sector/industry), and style (value/growth).

Number of Constituents 293 Adjusted Market Cap ($ Billion) 887.85

The S&P Latin America 40 is is a much smaller index drawn from five major Latin American markets: Brazil, Chile, Colombia, Mexico, and Perú. It is designed for investors seeking broad market exposure through an index that is efficient to replicate. The index constituents are leading, large, liquid, blue chip companies from the Latin American markets, capturing 70% of their total market capitalization.

Here are details of this index as of the end of 2011.

latin charts


[showad file=””]