Tuesday, March 25, 2014

Latin Amercan ETFs Underperforming

Above is a one year comparison chart for 6 Latin American ETFs.  With the exception of Argentina, all are in negative territory.  There are two underlying reasons for this.  The first is the negative impact of China's economic re-balancing, which is negatively impacting countries like Peru and Chile.  Consider this chart of exports from those two countries:

While exports from both countries picked-up after the great recession, both have seen a stalling since roughly mid-2010.   This has also hurt Brazil, another net exporter.  Mexico's economic fortunes are tied to the US' so as concerns about the US economy built, Mexico's equity index underperformed.