The top five holdings of this ETF are Itau Unibanco Holding SA ADR (ITUB.SA, 9.00% of assets); Vale SA ADR (VALE.SA, 7.56%); Bank Bradesco SA ADR (BBD.SA, 7.09%); Ambev SA ADR (ABEV.SA, 6.00%) and America Movil SAB de CV Class L (AMXVF.MX, 4.89%).
iShares Latin America 40 ETF (ILF)
from The Investment Letter
In 2017, the new hotspot for emerging market investments has been Latin America. Year-to-date, the iShares Latin America 40 ETF (ILF) is up 27%. The S&P 500 Index, which is having a pretty good year too, is up just 11% this year.
ILF invests in major companies that dominate the Latin American market. Not surprisingly, shares from Brazil (51%) and Mexico (31%) dominate the fund, but Chile (10%) and Peru (5%) help diversify the ETF a little bit.
While it is tempting to assume that these Latin American stocks must now slow thanks to the outsized gains they have made this year, I suspect they have more room to run. While most world markets have been climbing for years, Latin America got a late start when it comes to this bull market. Over the past five years, the U.S. market is up 75%. The ILF ETF is down 15%.
While I do not think ILF will rally high enough to equal the long-term returns of U.S. stocks, I do believe that investors around the world will continue to flock to Latin America, precisely because they represent a great value relative to overpriced stocks in North America, Europe and Japan.
If you have not yet looked into Latin America, I urge you to take another look today. If you are nervous about jumping in with both feet, start small and dollar-cost average your way in.
David C. Jennett, The Investment Letter, P.O. Box 6170, Holliston, MA 01746, 800-542-5018, September 26, 2017