- Latin American stocks remain exceptionally cheap relative to the rest of the world, having largely failed to join in with the global recovery.
- The iShares Latin America 40 ETF is now deeply undervalued relative to Emerging and Developed Market benchmarks, thanks to a combination of lower earnings multiples and depressed currency valuations.
- This is despite a boom in commodity prices that has sent Brazilian, Chilean, and Peruvian terms of trade to new record highs and points to a strong recovery in earnings.
- While the potential upside for the Brazilian real is the main reason for owning ILF, the ETF offers some degree of diversification compared with buying EWZ, as well as a higher dividend yield and lower expense ratio.
For further details see:
ILF: Latin Stocks Among The Few Bargains Left