Latin America ETFs focus on countries like Brazil, Mexico, Peru, Colombia and Argentina which are some of the fastest growing regions of the world. Latin America is considered a global powerhouse for food and commodities production. This has created a surge in interest amongst US and other foreign investors. There are a number of ETFs that contribute to the Latin American market. Below are the key Latin America ETFs
iShares Latin American 40 Index Fund (ILF)
iShares Latin American 40 Index Fund (ILF) : The stock market is represented by ILF which holds major contribution in the Latin American stocks.This Latin American ETF tracks the S&P Latin America 40 Index which measures the performance of equity markets in Brazil, Argentina, Peru, Mexico and Chile. It has about $2.6 billion in assets and 34 holdings. As a major performer, ILF carries big allocations to the financial and materials sectors of the region. This includes much influence in mining giant Vale and PetroBras, the energy firm.
SPDR S&P Emerging Latin America ETF (GML)
SPDR S&P Emerging Latin America ETF (GML): offering greater depths of exposure, this ETF is similar in many ways to ILF. It has about $197 million in assets and 102 holdings. The largest weightings are for the Brazilian and Mexican equities. GML reflects the performance of S&P Latin America BMI index. Both GML and ILF are heavily weighted in materials and composed of large-cap international corporations.
Market Vectors Latin America Small Cap ETF (LATM)
Market Vectors Latin America Small Cap ETF (LATM): This is an exclusive Latin America ETF for the small cap stocks. It has a market cap of about $1.4 billion which is significantly smaller than most of the large cap ETFs. Brazil and Mexico has larger percentages of contributions in LATM of 43% and 23% respectively, the 34% are for the other countries of Latin America. These perform well in periods of economic recovery. The fund’s top weightings are because of the growing middle class and vast natural resources of Latin America. The market contribution is 26.2% materials, 22.6% consumer discretionary, 14.2% industries and 12.1% financials.
Global X FTSE Andean 40 ETF (AND)
Global X FTSE Andean 40 ETF (AND): Global X is one of the main Latin America ETF providers market with six funds which have products that tracks the individual economies of Colombia and Argentina. The Andean region is comprised of Chile, Colombia and Peru. It has focused on the market because of the resources and growth potential in the region. This ETF was launched to take advantage of merging stock markets of Andean region which is presumed to create the second largest stock exchange in Latin America after Brazil and Mexico.
- Other major contributors for Latin America ETFs include iShares MSCI All Peru Capped Index Fund (EPU), iShares MSCI Chile Investable Market Index Fund (ECH), Brazil Small-Cap ETF (BRF) and iShares MSCI Mexico Investable Market (EWW).
Latin America’s GDP is growing at an average f 4.6% annually since 2005. Small cap stocks hold a good position in this region because of the local economic trend. Brazil stock exchange Bovespa dominates the Latin ETFs. There is more exposure in the ETFs by Brazil than any other country of the Latin American region.