Latin American stocks and mutual funds focused on that region have had a resurgence over the last two years. That’s largely because of China’s strong demand for raw materials and the U.S. economic rebound, both of which have helped fuel the market for commodities and other exports from countries south of the border.
The average Latin American fund (there are only five) returned 39.7% for the 12-month period through November, while the S&P/IFCI Latin America index gained 43.2%. By comparison, the S&P 500 index of exclusively U.S. stocks was up 12.7% during that span.
Brazil and Mexico have the region’s largest economies. Growth in Latin America last year was primarily spurred by growth in Brazil, notes William Landers, who manages the Merrill Lynch Latin America Fund (MALTX).