Over the past decade, Latin America has brought more stability to its political and financial systems, paving the way for a stronger workforce and a rise in consumer spending as urbanization climbs to over 70%.1 As a result, the region continues moving away from its reputation of high volatility and now provides potential long-term investment opportunities.
The Aberdeen Latin America Equity Fund, Inc. (LAQ) aims to offer investors a portfolio of balanced holdings that aligns with positive trends in this often overlooked region.
Latin America’s middle class is exploding.
Many of the upward trends in Latin America are directly connected to its growing middle class, which is larger than China and four times greater than the other emerging Asian countries. Young and increasingly urbanized populations are advancing the region’s workforce, giving consumers in the five major Latin American countries more purchasing power than ever, especially in categories like automotive, fuel and packaged goods. Aberdeen has included companies from these sectors in the Aberdeen Latin America Equity Fund.
As this rising demographic continues to exert its spending power across these industries, we believe the long-term picture also looks promising. There are an unusually large number of young consumers in this region who haven’t even entered the most productive phases of their lives.
In addition to a rise in consumer spending, Latin American countries also benefit from being rich with natural resources and raw materials, making them less dependent and less susceptible to volatility in foreign economies. For example, only 11.5% of Brazil’s GDP relies on exports.2 While Latin American countries are extremely important in the context of the global economy, their self-sufficiency and increased domestic demand makes them less likely to be impacted by recessions in other parts of the world.
Download the Aberdeen Latin American Equity Fund factsheet to learn more about the fund’s objective, policies, performance and more.