NEW YORK (SmartStops) -- As the developed world continued to struggle out of the Great Recession in 2010, emerging markets performed relatively well, and they're expected to sustain this growth and performance in the coming year.
China continues to draw headlines and steal most of the attention, but in the coming year, Latin America may be the place to look.
Inflationary threats and real estate bubbles have forced China to increase its benchmark interest rates for the second time in three months and increase banking reserve ratios to reduce risk, which could hinder future growth.
A different song is being sung in Latin America as inflation is expected to remain subdued. This is expected to lower pressure on central banks to raise interest rates.According to experts at Bank of America/Merrill Lynch, the true driver behind Latin America's prosperity in the coming year is expected to be domestic consumption, driven by increased purchasing power. Many Latin American nations, such as Brazil, Chile and Peru, are rich in commodities. As demand for energy commodities such as crude oil and agricultural commodities such as corn and sugar remain insatiable worldwide, these nations are bound to reap the benefits of rising commodity prices. Increased commodity prices and underleveraged companies and households create the perfect mix to fuel domestic growth in these nations. To gain access to Latin America, one could consider the following: iShares S&P Latin America 40 Index Fund (ILF), which is a diversified play on Latin America that allocates 56.45% of its assets to Brazil, 24.53% to Mexico, 12.29% to Chile and 5.98% to Peru. ILF allocates nearly 26.2% of its assets to materials, 21.9% to financials and 12.8% to consumer staples. SPDR S&P Emerging Latin America ETF (GML), which allocates 64.57% of its assets to Brazil, 20.58% to Mexico, 10.41% to Chile and 4.45% to Peru. GML devotes nearly 24.7% of its assets to materials, 19.9% to financials and 13.4% to energy. At the time of publication, Grewal had no positions in stocks mentioned. --Written by Kevin Grewal of Smartstops.
>To contact the staff member responsible for this article, click here: Ross Snel. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV