Latin Funds Soar Northward

Investing in Latin American stocks has been very lucrative the past few years. The continent offers immense commodities and natural resources, a cheap labor force, and an improving economic infrastructure.

Indeed, high energy prices and China’s inexhaustible appetite for raw materials has driven much of the growth of these nations. But as an emerging market, Latin America presents risks related to political instability, high debt profiles, and unattractive currency exchange rates, among others. Moreover, the strong returns recently enjoyed by these equity markets may compel some U.S. investors to opportunistically move their money to other global regions in 2006.

Among the best long-term performers in this sector, the $852.8 million T. Rowe Price Latin America Fund (PRLAX) seeks companies that can “achieve and sustain above-average, long-term earnings growth.” Reflecting the domination of Brazil and Mexico in Latin economies, about 90% of the fund’s assets are invested in these two countries alone.