Fund of the week - Latin America: better than Asia?
It’s hard to think of any markets untouched by the ructions in the global economy. But one that is proving more resilient than most is Latin America.
Most developed markets are a mess – the S&P 500 is down 12% and the FTSE 13% year to date – but Latin America has fared rather better: it
is down only 4%. And Dean Newman’s Invesco Perpetual Latin America Fund has done better still. It has fallen this year, but only by 3.4%, which, given the environment, really isn’t bad.
Long-term investors are also likely to be forgiving: over the past five years, the fund has returned 604%, outperforming the MSCI emerging markets Latin America index, which posted a 587% return. And now? “My perspective is that it (the region) offers reasonable value. It is cheaper than some other emerging markets, certainly cheaper than Asia,” says Newman in The Daily Telegraph.
The fund should be helped by the fact that global demand for the rich store of commodities found in Latin America has soared, with the price of resources, such as oil and copper, rocketing. To add to this, “changes to fiscal and monetary policy have also boosted economies in the region”, says Fund Strategy. “Latin America has its economic house in order,” Newman tells the magazine. interest rates are low and inflation
is contained.
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The majority of the fund, almost 65%, is currently invested in Brazil – a particular beneficiary of the commodities supercycle, with another sizeable chunk in Mexico. The rest is split between cash and other small stakes in Chile and Peru.
Contact: 020-7065 4000
Invesco Perpetual Latin America Fund top ten holdings
Name of holding, % of assets
Petroleo Brasileiro SA Petrobras, 11.40
Companhia Vale Do Rio Doce, 9.90
America Movil Sab De CV, 5.60
Banco Bradesco SA, 3.80
Banco Itau Pref, 3.60
Ambev, 3.40
Unibanco Holdings SA, 3.00
Telmex Corp SA, 2.60
Fomento Economico Mexcano Sab De CV, 2.30
SLC Agricola SA, 1.80
