Rio De Janeiro, Brazil
The Grande Latin America ETF is the iShares S&P; Latin America 40 Index Fund (ILF) since it has the 40 largest companies in Latin America as defined by the S&P; Latin America 40 Index.
S&P; Definition for this Index:
“S&P; Latin America 40 represents major economic sectors of Mexican and South American equity markets. It includes highly liquid securities from Mexico, Brazil, Argentina and Chile. ”
ETF Profile:
The largest ETF for the top companies in emerging Latin America is ILF. It has assets of just over $2.0B. ILF gives exposure to four countries and 36 stock. The other for Latin America SPDR S&P; Emerging Latin America ETF (GML) has a tiny asset base compared to ILF.
Some of the largest companies in the ETF are America Movil(Mexico), Petrobras (Brazil), CIA VALE DO RIO DOCE(Brazil), three banks of Brazil – Banxo Badesco, Itau Bank, Unibanc, Cemex and Walmart De Mexico of Mexico.
ETF Strengths:
- Contains the largest 40 companies in Latin America
- Financials make up only 16%
- Management fees of 0.50%
- Year-To-Date return = -4.74% only
ETF Weaknesses:
- Since it is for Latin America this ETF’s performance is tied closely to the commodity markets
- The Top 10 stocks account for about 70% of portfolio.
Overall picking up ILF is a better way to invest in Latin America in this market. Caution is warranted as Latin American markets are not for the faint hearted and commodity markets are very volatile and risky.
