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Since Brazil is the big kahuna (and Mexico a smaller one) for Latin America, the only way to really separate a fund from the pack is to avoid holding Vale, PetroBras, and America Movil, or at least hold them in smaller percentages. And then hope your other picks can beat the big guys. Very difficult to do, at least over longer time periods. As the region continues to develop, this will probably change. But for now, the 5-year numbers would indicate ILF is a viable option, with much lower expenses.
DWS is unimpressive, and JP Morgan's 1.65% expenses are pretty crazy. BlackRock and Fidelity are pretty decent options. But at this point ILF appears to have the edge.
Reply to @BobC: I like FEMSA in Mexico (FMX or FMXUF), which owns a stake in Coca-Cola FEMSA, Heineken and the massive OXXO convenience store chain. Vale is also interesting at these levels (I think.) Fund-wise, I continue to like the Brazil consumer ETF (BRAQ).
Reply to @scott: Yes in addition to BRAQ, ECON also has a hefty 50% allocation to Latin America right now which might be good as an additive play to the typical Latin American fund that focuses on cyclical mega-cap names. Consumer oriented stocks might be a better play or at least help to diversify the heavy commodity and financial related stocks in many Latin America funds.
Reply to @Kenster1_GlobalValue: A number of the consumer or consumer-related names are good or great long-term growth stories, but a number of them have run up quite a bit - Ambev (ABV) is a prime example (which is 11% of ECON), and they are issuing new shares. Cielo (CIOXY) - to a lesser degree - is another (classified as a financial, but having to do with consumer activity), although their issue of new shares was distributed among all current shareholders. Cielo will probably face increasing competition, but I think it's otherwise an interesting play on increasing consumer activity in the area over time (and the results from BR Malls - which is now working with Simon Properties to open outlet malls - would suggest activity is increasing.)
That's why while I like consumer names, I just find - if I was going to look at Latin America and make new investments - the Vales, the Petrobras (Petrobrai?) down substantially are - at least currently - more compelling. I think what happened in Argentina with YPF has caused some hesitation, and has caused more substantial concern with companies that have more direct exposure, such as Adecoagro (AGRO), which is about 31% owned by Soros. Petrobras Argentina (PZE) also down just a wee bit.
Despite a large holding in Ambev (which is a good long-term story, but just has run up a lot), ECON is still interesting as a broader play on the emerging consumer. Additionally, as for consumer names, I think it will be interesting to see how the Wal-Mart De Mexico situation plays out and if other, local companies can gain share.
Of this, I am sure you are aware; that Bolivia also chooses to "nationalize" a power grid company (another Spanish company). We'll Take That, too
Some of the South American countries continue to not have moved away from their sad past histories of the 50's-70's; and are locked into a mindset that will not be of benefit. The top power fools continue their reign. I can not imagine foreign investment wanting to move more monies for projects in these countries...Argentina and Bolivia, and will be wary of others, too.
Some countries feature bond issues in both local and foreign currency. The latter, denominated, for example, in the U.S. dollar or Japanese yen, can be used to build up their hard-currency reserves, improve their balance between assets and liabilities, and support their local bond markets in general.
Mr. Hoguet favors a strategic allocation to both hard- and local-currency debt. An investor in local-currency bonds does assume currency risk, he says. But holding a portion of one's wealth in a basket of foreign currencies is advisable, he says, as a portion of one's consumption over time comes from foreign goods produced both in developed and emerging markets.
{...}
When an investor likes a particular emerging market, and its debt market is strong, some advisers recommend alternating between local asset classes, depending on conditions. Mr. Harting, for example, likes Mexico because of its growth. But for now he says he can find only a few equities in Mexico that are well priced. So he has bought currency for growth and Mexican bonds for diversification.
Reply to @catch22: Hey Catch, beware of conventional wisdom. Look at the GDP chart near the top of this page, and see if you think Argentina has not set a decent course for itself in the past decade:
Howdy AndyJ, Thank you for the link. Have to run for a bit; but I will await to find whether M. Krugman replies to any in the comments section, which offer different opinions that indicate whatever GDP may or may not be, it is not the total picture. All of my Argentinian politician/economic favorite sites were deleted last year; so my quick and dirty research area is nill. There are a few folks in the area from neighboring countries; but I don't know of any from Argentina, who(m) I could query. Take care, Catch
Reply to @catch22: Hey Catch, Right, GDP is never the whole picture of a nation or an economy. I take PK's comment more or less as he states it, that this is a quick look to dispel the notion that Argentina did itself in by giving the IMF et al. the swift kick, and sending the global financial elite's supporter in the presidency, Carlos Menem, to the sidelines in '99. In that limited sense, I think it's plenty reasonable.
Fyi, PK usually doesn't reply directly to the many comments on his blog.
You noted: "Fyi, PK usually doesn't reply directly to the many comments on his blog." One may hope that he actually reads the comments. Perhaps it is not in his nature or attitude or considers such things as a waste of his time. 'Course, if this is the case, he could always conserve electrical energy (go more green, eh?) and not write anything that he did not expect to reply against from others comments.
Okay, enough about Mr. K and whatever his conventional wisdom may consist. He is surely more educated than this writer.
Comments
DWS is unimpressive, and JP Morgan's 1.65% expenses are pretty crazy. BlackRock and Fidelity are pretty decent options. But at this point ILF appears to have the edge.
That's why while I like consumer names, I just find - if I was going to look at Latin America and make new investments - the Vales, the Petrobras (Petrobrai?) down substantially are - at least currently - more compelling. I think what happened in Argentina with YPF has caused some hesitation, and has caused more substantial concern with companies that have more direct exposure, such as Adecoagro (AGRO), which is about 31% owned by Soros. Petrobras Argentina (PZE) also down just a wee bit.
Despite a large holding in Ambev (which is a good long-term story, but just has run up a lot), ECON is still interesting as a broader play on the emerging consumer. Additionally, as for consumer names, I think it will be interesting to see how the Wal-Mart De Mexico situation plays out and if other, local companies can gain share.
Of this, I am sure you are aware; that Bolivia also chooses to "nationalize" a power grid company (another Spanish company).
We'll Take That, too
Some of the South American countries continue to not have moved away from their sad past histories of the 50's-70's; and are locked into a mindset that will not be of benefit. The top power fools continue their reign. I can not imagine foreign investment wanting to move more monies for projects in these countries...Argentina and Bolivia, and will be wary of others, too.
Regards,
Catch
Advisers suggest investors look beyond stocks
http://online.wsj.com/article/SB10001424052702304356604577337972147307402.html?mod=WSJ_PersonalFinance_PF14
Some countries feature bond issues in both local and foreign currency. The latter, denominated, for example, in the U.S. dollar or Japanese yen, can be used to build up their hard-currency reserves, improve their balance between assets and liabilities, and support their local bond markets in general.
Mr. Hoguet favors a strategic allocation to both hard- and local-currency debt. An investor in local-currency bonds does assume currency risk, he says. But holding a portion of one's wealth in a basket of foreign currencies is advisable, he says, as a portion of one's consumption over time comes from foreign goods produced both in developed and emerging markets.
{...}
When an investor likes a particular emerging market, and its debt market is strong, some advisers recommend alternating between local asset classes, depending on conditions. Mr. Harting, for example, likes Mexico because of its growth. But for now he says he can find only a few equities in Mexico that are well priced. So he has bought currency for growth and Mexican bonds for diversification.
http://krugman.blogs.nytimes.com/2012/05/03/down-argentina-way/
Cheers, AJ
Thank you for the link.
Have to run for a bit; but I will await to find whether M. Krugman replies to any in the comments section, which offer different opinions that indicate whatever GDP may or may not be, it is not the total picture.
All of my Argentinian politician/economic favorite sites were deleted last year; so my quick and dirty research area is nill.
There are a few folks in the area from neighboring countries; but I don't know of any from Argentina, who(m) I could query.
Take care,
Catch
Right, GDP is never the whole picture of a nation or an economy. I take PK's comment more or less as he states it, that this is a quick look to dispel the notion that Argentina did itself in by giving the IMF et al. the swift kick, and sending the global financial elite's supporter in the presidency, Carlos Menem, to the sidelines in '99. In that limited sense, I think it's plenty reasonable.
Fyi, PK usually doesn't reply directly to the many comments on his blog.
You noted: "Fyi, PK usually doesn't reply directly to the many comments on his blog."
One may hope that he actually reads the comments. Perhaps it is not in his nature or attitude or considers such things as a waste of his time. 'Course, if this is the case, he could always conserve electrical energy (go more green, eh?) and not write anything that he did not expect to reply against from others comments.
Okay, enough about Mr. K and whatever his conventional wisdom may consist. He is surely more educated than this writer.
Thank you for the "back and forth".
Take care,
Catch