Commodity price recovery puts Latin America on map

WHAT DOES IT DO?

Invests in Latin American companies. Some 60pc of the trust’s money is in Brazilian firms, while 31pc is in Mexico and 6pc in Peru. Around a quarter of its investments are in financial firms and the same proportion in defensive consumer stocks.

WHAT DOES THE MANAGER INVEST IN?

Manager Will Landers has been investing more in Brazil since the start of the year. He says: ‘If the country gets inflation under control and its fiscal house in order then interest rates should fall and that will help the consumer in the long term.’ He likes domestic financial companies, where private banks have been prudently managing their loan books, and energy firms which have benefited from a commodity price rally.

WHAT DO THE EXPERTS SAY?

Ben Yearsley, director at Wealth Club, says: ‘Latin American company shares have picked up strongly this year because of commodity prices, on which the region is very dependent, and also the strengthening Brazilian currency.’

WHAT DO THE EXPERTS LIKE?

Yearsley says the trust has most of its money in Brazilian and Mexican firms, some of the strongest in the region. ‘The dividend yield is attractive at about 3.5pc but after such a strong bounce back this year it may be worth waiting before investing.’

AND ARE THERE ANY DOWNSIDES?

Emerging markets are notoriously volatile to invest in and have had a tough few years, evident by the ups and downs in the trust’s performance. Such a strong rally – it is up almost 50pc over the past six months – could mean another fall is due if the countries can’t deliver on their promises.