This column was originally published on RealMoney on Oct. 11 at 1:24 p.m. EST. It's being republished as a bonus for TheStreet.com readers.

Many very smart investors, including Jim Rogers, believe we are in the first few years of a 15- to 20-year bull market for commodities. That's one of a number of reasons to diversify your portfolio with exposure in Latin America.

Besides being commodity and resource rich, the Latin markets historically have a low correlation to the S&P 500. As emerging markets, they tend to have much bigger swings up as well as down.

Latin America turned in an excellent performance last quarter, but as I predicted last week in Columnist Conversation, a pullback in the region has gotten under way. The bigger markets in the region fell 5%-8% from the end of the quarter to Thursday's close. Now is certainly a better entry point, but there could be more room to fall.

Three exchange-traded funds from iShares invest in the region: iShares Latin American 40 Index Fund ( ILF), iShares MSCI Mexico Index Fund ( EWW) and iShares MSCI Brazil Index Fund ( EWZ). In addition to the ETFs, there are at least half a dozen closed-end funds, many open-end funds and, of course, individual stocks.

When looking under the hood of the three ETFs, it should not be a surprise that there's a lot of sector overlap and that the three have a high correlation. Materials investments comprise 28% of iShares Latin America, 29% of iShares Brazil and 17% of iShares Mexico. iShares Mexico has 40% in telecom (heavy telecom exposure is common in emerging markets), but it still trades similarly to the other ETFs. I believe this is because resources and energy drive the economic cycles of all of these countries and spur demand for the corresponding equities.

As is the case with most regional and single-country ETFs, the top few holdings have a sizeble weight. I don't think it invalidates the premise, but it's worth knowing that 24% of iShares Brazil is allocated to the common and preferred issues of Petrobras ( PBR), and 23.5% of iShares Mexico is invested in America Movil ( AMX).

iShares Latin American ETFs
The S&P Latin America 40 Index Fund (ILF), MSCI Mexico Index Fund, (EWW) and MSCI Brazil Index Fund (EWZ) have similar track records over the past two years.
Source: BigCharts.com

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