Introduction
Latin American politics has been dominating headlines recently, so UK investors in the region may have been distracted by some of the political and economic noise.
Andrey Kuznetsov, portfolio manager at Hermes Investment Management, admits: "Voter anger over corruption has also shaped recent elections in other Latin American countries."
But there is more to the region than its politics - Latin American fixed income markets have been performing well, even if its equity markets have not.
"Latin American credit has outperformed all other emerging market (EM) regions – in terms of total return – for the past three years," Mr Kuznetsov points out.
The presidential election in Brazil saw the country's population elect far right politician Jair Bolsonaro.
But Conrad Saldanha, senior portfolio manager, emerging markets equity and Gorky Urquieta, global co-head of emerging markets debt at Neuberger Berman, suggest there may not be as much to worry about as investors think, explaining: "[Mr] Bolsonaro, with his authoritarian instincts and controversial statements, is part of a global wave of conservative populism.
"However, while his campaign has been vague on the economy and he has voted against reforms in the past, his recent tone has been anything but populist."
This guide to investing in the region, which is worth an indicative 60 minutes of CPD, looks at the long-term prospects for investors and why this year has been a tough one for Latin American equities.
It also considers how political change might shape Latin America in the years to come and the drivers behind the solid performance of its bond markets in recent years.
Contributors to this guide: Andrey Kuznetsov, portfolio manager at Hermes Investment Management; Conrad Saldanha, senior portfolio manager, emerging markets equity and Gorky Urquieta, global co-head of emerging markets debt at Neuberger Berman; Aneeka Gupta, associate director for research at WisdomTree; Xavier Hovasse, manager of the Carmignac Emerging Discovery fund; Raphael Marechal, head portfolio manager for emerging markets at Nikko Asset Management; Wim Vandenhoeck, manager of the Emerging Markets Local Debt fund at Oppenheimer Funds; Mike Ingram, chief market strategist at WH Ireland; Paul McNamara, investment director at Gam; Eddy Sternberg, co-portfolio manager for emerging markets debt portfolios at Loomis Sayles; Michael Wang, fund manager for the global emerging markets and Asia team at Polar Capital; Tom Smith, co-head of emerging market equities at Neptune Investment Management; Lena Tsymbaluk, investment analyst at Morningstar; Investment Association; Morningstar.
eleanor.duncan@ft.com
