Where to place your bets in the rise of a new trade superpower

Latin America is banding together to improve trade, and business is booming. British investors should grab a slice of the action, says James McKeigue. Here, he tips the best shares to buy now.

Emerging markets are in meltdown. Investors pulled $20bn out of emerging-market equity funds in June, a record. It was the same for the bond market: emerging-market debt funds lost almost $6bn in the last week of June another record. The MSCI Emerging Markets stock index is down 13% since mid-May.

The sudden dose of risk-aversion is partly due to the US Federal Reserve's hint that it will taper quantitative easing (QE). QE has helped suppress yields on US corporate and government bonds, driving investors to reach for yield in more exotic locations with some worrying results. For example, South America's poorest economy, Bolivia which has a history of expropriating Western firms was recently able to borrow at just 4.9%, even though it had been nearly 100 years since it issued a government bond. But now, with the Fed hinting at tighter monetary policy, risk appetite has dived.

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James McKeigue

James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ. James has worked as a freelance journalist in various Latin American countries.He also had a spell at ITV, as welll as wring for Television Business International and covering the European equity markets for the Forbes.com London bureau. James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.