LatAm Es Muy Caliente Now

This column was originally published on RealMoney on Aug. 18 at 10:48 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Asia appears to have captured the imagination and purses of many investors, but quietly, most Latin American currency and equity markets have been red-hot and indeed have generally outperformed Asia.

The Brazilian real has appreciated nearly 14% against the U.S. dollar this year, making it the best-performing currency. The main Brazilian stock market, the Bovespa, has gained a little more than 3% in local currency terms, and many of its other indices are up around 10%.

The Mexican peso and Bolsa have also been strong performers. The peso has appreciated almost 5% against the U.S. dollar, making it the second-best performing currency among the larger countries this year, and on a year-to-date basis, the Bolsa is up nearly 13%.

But the gains in the real and Mexican peso are really emblematic of the region as a whole. While the U.S. dollar has defied expectations by rising against the major currencies, including the Japanese yen, Singapore dollar and Taiwanese dollar, it has fallen against many LatAm currencies.

• The Chilean peso has gained about 3.5%;

• The Argentine peso is up about 3%;

• The Colombian peso has appreciated about 2%;

• The Peruvian New Sol is up by around 1%; and

• Uruguay's peso, which often appears to shadow the Brazilian real, has gained more than 8% against the U.S. dollar.

The equity market gains haven't been limited to Brazil's Bovespa and Mexico's Bolsa either. In fact, many of the Latin American equity markets are turning in healthy gains this year. High commodity prices, like iron-ore, copper and oil, coupled with strong demand from China and near-trend growth in the U.S. are clearly helping.

The Colombian stock market has surged almost 60% this year in local currency terms. Chile, where the central bank has tightened monetary policy earlier this month, has seen its stock market rally nearly 18% this year. Peru's general index has gained around 21%. Argentina's Merval Index has tacked on about 7.5%.

Venezuela is the main exception to the positive regional pattern. The currency, the Bolivar has depreciated by more than 10% against the dollar this year, and the stock market has plummeted more than 37%. The domestic politics of President Chavez, which have seemingly been designed to alienate the investor class, are largely the issue here, despite Venezuela being a significant oil producer and a member of OPEC.

For U.S.-based investors, there are a few ways to invest in Latin American companies.