Fund Review: Fidelity Funds Latin America

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Fund Review: Latin America

Looking ahead the manager acknowledges the team anticipates bouts of volatility and macro headwinds to continue in the area. “Expectations remain low in the region and emerging market equities will be impacted by governments’ reform measures and investors’ reactions to these efforts. In addition, markets will continue to be influenced by ‘global’ topics, such as the future pace of economic expansion in China and monetary policy in the developed world, as the developing and developed worlds are inextricably linked through global capital and trade flows.”

But he adds: “Domestic consumption is an engine of economic expansion in Brazil and Mexico, and is often overlooked by investors. In parallel with this, the appetite for change in the region is vital to the future prospects of these economies.”

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Ben Willis, head of research and investment manager, Whitechurch Securities

It has been a baptism of fire for manager Angel Ortiz, as well as being a torrid time for Latin American funds in general. In relative terms, Mr Ortiz should be given some credit for having outperformed this fund’s peer group average. However, the portfolio has still lost around 30 per cent in the past 12 months. These equity markets may be of interest to the contrarian, but it is unknown how well Mr Ortiz will fare if they move back into favour. If you believe that Latin American markets are set to recover strongly, then it is hard to argue against the beta option of a low-cost, index tracker.