Although not uniform across the region, a number of Latin American equity markets have outperformed the S&P 500 year to date (YTD). Emerging markets in Peru, Colombia, Brazil, and elsewhere have all beaten the S&P's 9% YTD returns, thanks to a combination of factors, including higher prices for certain commodities, growing AI-related demand for outputs such as copper, lithium, and nickel, and favorable company valuations.
Globally, investors are rotating toward emerging markets to capture strong earnings growth and to take advantage of these lower valuations, and the Latin American market may be poised to continue to benefit from that pivot. While risks remain—economic growth remains modest overall, and political instability is a central feature in many countries, for instance—U.S. investors can easily build exposure to the space with the use of several dedicated exchange-traded funds (ETFs).
