Latin American stocks rebounding in 2025, with potential upside for investors

From Morningstar: 2025-05-23 04:32:00

Latin American stocks are gaining attention from investors, with Morningstar Investment Management and managers on The Long View podcast highlighting the potential upside in the region. The Latin American equities asset class is dominated by markets like Brazil and Mexico, with a heavy focus on financial services and basic materials sectors. Brazil’s dependence on natural resources impacts its economy and stock market performance. Latin American stocks have underperformed the US market, with volatility and political issues affecting performance. Despite challenges, opportunities exist for investors in Latin American equities. Portfolio managers like Sudarshan Murthy and Justin Leverenz see potential in Brazilian and Mexican stocks, citing factors like evolving institutions and well-run companies. Morningstar Multi-Asset Research models suggest attractive returns for Brazil and Mexico in USD terms, outperforming US stock expectations. Accessing Latin American stocks through diversified international equities funds or emerging-markets-specific strategies is recommended due to volatility and country risk. Morningstar equity analysts cover Latin American companies with competitive advantages or economic moats.



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