Stocks Heat Up South of the Equator

It's springtime south of the equator, which means it is about to get hotter. So, too, could Latin American stocks.

"I can't blame anyone for taking profits after this tremendous run," says Will Landers, portfolio manager for the $680 million (MDLTX Quote)BlackRock Latin America fund, in a recent Street.com TV interview. "But the fundamentals for further growth are still intact."

Landers' fund has surely been sizzling, rallying on the heels of the emerging market commodity boom. It's up 49% year-to-date and has returned an average of 60% annually over the past three years. And Landers is confident that the good times will continue -- especially in Brazil, where he has allocated two-thirds of his holdings. Most notably, the fund's investment in mega-miner Companhia Vale do Rio Doce(RIO Quote) comprises 15% of its assets.

"CVRD is diversified, but its major business is still iron ore," says Landers. "There is little doubt that iron ore prices are going up significantly next year and three producers dominate that market: CVRD, BHP Billiton(BHP Quote) and Rio Tinto(RTP Quote)."

Shares of Brazilian oil giant Petrobras(PBR Quote) are up 60% this year. Petrobras is currently slightly less than 10% of the fund, and despite its mammoth run, Landers says it remains the most attractively priced emerging market oil stock.

"Petrobras will benefit when Brazil's debt rating is raised to investment grade and the country risk premium goes down," says Landers. "The fixed income markets are already hinting that an upgrade is in the works."