Investment Tust Insider on Latin America
James Carthew: Latin volatility requires a long-term view
Latin America has done surprisingly well since I last looked at BlackRock Latin American (BRLA) and Aberdeen Latin American Income (ALAI) two-and-a-half years ago. Its markets were very much out of favour as sabre rattling by Maduro in Venezuela, falling commodities prices, corruption scandals in Brazil and a likely extension to Peronist policies in Argentina under presidential candidate, Daniel Scioli, contributed to a slump in the region’s fortunes.
I concluded by saying that BRLA was a contrarian bet but, when things did take a turn for the better, you could do very well.
Since September 2015, BRLA and ALAI have both returned 71.5%. The best-performing markets in the region have been Peru and Brazil, up 134% and 118% respectively. The other market that did very well was Argentina which rose by 58% in sterling terms last year, I think making it the best performing market in the world. The laggard has been Mexico, a key component of the MSCI Latin America index (23% of the index against 60% for Brazil), which returned 10%.
The main drivers have been political but commodity price swings have also had an influence. The Peruvian stock market had a great 2016… read more here