Exchange traded fund (
) investors may have noticed that some areas of the markets are
covered by multiple ETF products. Though the funds may be similar,
fund providers offer different styles in managing their ETF
products. Let's take a closer look at two Latin America ETFs.
The International Monetary Fund (
) recently stated that Latin America's economy could expand a
higher-than-expected 5% for the year. Brazilian economists are even
more bullish, predicting that Brazil's economy will grow 7.2% this
Brazil ETFs Lead the Latin American Economy.
The Brazilian Central Bank President Henrique Meirelles expects
that the economy will continue to accelerate in the third quarter
despite recent slowdowns. [
Latin America ETFs: It's Not All About Brazil.
If you're having trouble choosing a single-country ETF to access
Latin America's fast-growing economies, consider one of the two
major Latin America ETFs. Let's compare:
iShares S&P Latin America 40 Index (NYSEArca:
. ILF is the largest of the two ETFs, with $2.6 billion in assets.
The ETF tries to reflect the performance of companies in the
Mexican and South American equity markets in the S&P's Latin
America 40 Index. The fund has 34 holdings and has an expense ratio
- Top holdings include: Vale Sa ADR at 12.22%, Banco Itau
Holding 11% and America Movil SAB 9.8%.
- Top sector allocations: Materials 26.6%, Financials 23.7%,
Consumer Staples 11.8%, Telecommunications Services 11.6% and
- Top country allocations: Brazil 58%, Mexico 22.6% and Chile
SPDR S&P Emerging Latin America (NYSEArca:
. GML has $197 million in assets and tries to reflect the
performance of the S&P Latin America BMI Index. The fund has
102 holdings and has an expense ratio of 0.60%.
- Top holdings include: Vale S.A. 5.9%, Petrol Brasileiros 5.8%
and Itau Unibanco HOld 4.9%.
- Top sector allocations: Materials 26.7%, Financials 18.9%,
Consumer Staples 14.1%, Energy 13.01% and Telecommunications
- Country allocations: Brazil 65.9%, Mexico 18.9%, Chile 10.8%
and Peru 4.4%.
Both funds are heavily weighted in materials, which is one of
resource-rich Latin America's most important sectors. Both funds
are also nearly entirely composed of large-cap, international
To choose, consider how much exposure you'd like to Brazil (GML
is slightly more heavily weighted) and how comfortable you are with
exposure to financials - ILF has 23.7% vs. GML's 18.9%. [
Emerging Market Bank ETFs Emerge Stronger.
For more information on Latin America, visit our
Latin America category
Max Chen contributed to this article.