There are several misconceptions about investing in Latin America today. While many investors perceive the region to be volatile and financially weak with an unappealing corporate landscape, we disagree. Having invested in the region since the 1980s, our local “on-the-ground” presence allows us to see past these common misconceptions, and uncover the realities. Discover what we believe are compelling long-term investment opportunities in Latin America. Invest in reality, not perception.
Three reasons to invest in Latin American closed-end funds
In today’s volatile market environment, many investors overlook the potential opportunities hiding in the Latin American region. We believe that after taking a closer look at the current trends, the potential for long-term value becomes clearer.
1. Growing consumer demand
Many Latin American governments have succeeded in stabilizing and strengthening their financial and political systems in recent years following the financial crisis. Meanwhile, young and increasingly urbanized populations are advancing the region’s workforce, which has helped drive domestic demand. Latin America has historically benefited from exports and remains one of the world’s principal raw materials suppliers. In addition to this revenue source, the region's expanded focus on domestic consumption could provide a long-term boost for sustainable economic growth.
2. Improved corporate landscape
It’s not just the region’s economies that have improved—corporate Latin America has improved too. The region offers a large and expanding universe of high-quality companies. Many firms have reduced their debt levels, and profitability has improved. Moreover, management recognizes the need to focus on shareholder value and to adopt “best practice” in order to ensure they are equipped to compete in the global investment arena.
3. Long-term potential
With current market events such as a China slowdown, the threat of rising U.S. interest rates and a struggling stock market, many believe Latin America has found itself in a position from which it cannot recover. However, from our perspective, the future looks bright. Latin America's solid fundamentals make it a viable long-term investment opportunity, despite current market conditions.
In a world starved of growth, Latin America's growth prospects look more favorable when compared to developed markets. We are finding a steady flow of well-managed companies coming to the region's market, and the investment pool is growing each year. These companies are also operating in an environment of sound fundamentals where the region's debt relative to gross domestic product (GDP) remains low.
The Emerging Markets Equity team consists of nearly 50 investment professionals located in seven offices around the globe. The entire team is involved in the selection of stocks in the portfolio. We believe this cross-coverage provides enhanced depth and breadth of experience.
Our disciplined approach to asset management allows us to concentrate on companies that offer what we believe are positive prospects for long-term growth regardless of industry trends or market conditions.
International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods; these risks are generally heightened for emerging market investments. Concentrating investments in the Latin America region subjects the Fund to more volatility and greater risk of loss than geographically diverse funds. Equity stocks of small and mid-cap companies carry greater risk, and more volatility than equity stocks of larger, more established companies.
Unlock the potential of Aberdeen’s Latin American Closed-End Funds
Having invested in Latin America since the 1980s, we have long-established links within the region. We believe this “on-the-ground” presence allows us to evaluate investment opportunities from a position of experience. Discover how Aberdeen’s Latin American closed-end funds can provide you with diversified exposure to this dynamic region