How to invest in Latin America on the London markets

Buying Latin American shares can be a very risky business. One alternative is to buy funds. James McKeigue looks at the options available to British investors.

One of the most common things that readers say to me about Latin American shares is that they're too risky. Interesting story and all, they say, but there's no way that I'm sticking my money into a company that I've never even heard of. "Why don't you just recommend a fund?" they ask. So today I'm going to bow to reader pressure and take a look at the Latin American funds available to British investors.

My first gripe with Latin American funds is that they are often really just Brazil funds. It makes sense really. Brazil accounts for around 40% of Latin America's GDP so all Latin American funds tend to have a heavy Brazil weighting. But in many funds, Brazil's influence is even greater. That's because, thanks to its sophisticated and expansive financial services industry, it offers most of the region's equities. For example around 80% of the trades that take place in Latin American stock markets take place on Brazil's Bovespa exchange, the biggest in Latin America.

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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.