Is It Time to Invest in Latin America?
What does Latin America have that developed nations don’t have?
With valuations this attractive, Latin America is slowly catching on as a favored spot for investors. While commodities have long played the anchor, consumerism is now the key driver for most of these Latin American economies.
Emerging markets (EDC) (EMB), notably Latin American economies such as Mexico (EWW), Venezuela, Argentina, Chile, and Brazil, have younger populations than the developed world demographics are favoring the emerging markets.
Sectors that stand a better chance
Considering the favorable demographics in these economies, we may see the consumer, healthcare, banking and real estate sectors gaining prominence in the years to come. Facebook (FB), Google (GOOG), and Microsoft (MSFT) have established their bases in Columbia over the past few years. Recently, we’ve seen Tierra Funds putting money into Latin American real estate and AT&T (T) disclosing its acquisition of telecom spectrum in Mexico.
A recent entrant in the ETF industry, Tierra Funds is bullish on Latin American equity. Its Tierra XP Latin America Real Estate ETF (LARE) tracks the performance of companies actively involved in the Latin American real estate sector. 55% of the fund’s assets are invested in REIT equities. LARE is exposed to Brazilian, Mexican, and Chilean equities.
The valuations at which we currently see many Latin American economies trading would surely make investors do the cha-cha-cha.
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