Tapping growth opportunities in Latin America

Marketing material

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

When we're thinking about the factors and drivers that impact Latin America, it's critical we consider not the next six months, not the next 12 months, but the next three, five years and beyond.

And while the last 15 years in Latin America have been very challenged from a stock market viewpoint, from a political viewpoint, we think the way the world is stacked up today means that the period 2024 to 2039 will be a lot better for Latin America than the last 15 years have been.

We think that Latin America is a compelling destination for investments, partially because central banks have raised interest rates fast, early and by a significant amount, which meant that inflation has come down. And we are now seeing a reduction in interest rates across all of the countries. And this should lead to an improvement in economic activity.

Most of Latin America finds itself in that neutral category, a series of countries that are able to trade with both West and East, and attract investment from both west and east. this is actually quite a strategic advantage. Secondly, Latin America has had fairly high interest rates for a long period of time.

Most of the countries. Most of the people in those countries, most of the governments, most of the central banks are used to dealing with inflation and understand the dangers that it can bring.

As a result, the central banks are now in a position to not only understand inflation but reduce interest rates across Latin America, which would be helpful for the economies going forward.

By owning an actively managed investment trusts, it gives the underlying shareholder a unique opportunity to own more of companies that are doing the right things, and less of companies that are doing the wrong things.

And BlackRock is extremely well positioned to find those companies. There is someone from the team, they're having meetings, not just in corporate offices with CEOs and CFOs, but actually in factories, in supermarkets, in offices, in hotels, having these conversations and understanding where the real opportunities lie.

Most of the countries benefit from higher commodity prices, which are improving the external balance and can lead to a better economic environment.

Lastly, the region is also geographically isolated from most conflicts that we are seeing across the world.

Latin America, historically, over the last few decades has been an extremely volatile region.

But BlackRock, as well as the board believes that that brings up opportunities, particularly as this region has underperformed other regions for the last several years and is now at valuations that we have not seen for probably 20 or 30 years.

We have investments in the gold miner in Ecuador and a silver miner in Mexico.So that shows you, again, the vast resources that the continent has.

Brazil has an enormous commodity endowment, both of hard natural resources and soft commodities. The prices for these have gone up, and the number of countries and the range of different customers that the Brazilians now have keeps increasing.

Volumes of these soft and hard commodities keep increasing year by year. And this is enormous significance to the country.

There is no investment without risk. And the greatest risks are probably in those investments in emerging markets that people think are safe. So, our advice to investors would be one look at investments over the medium to long term, to be aware that price is extremely important and an attractive investment at the wrong price is not an attractive investment.

Thirdly, we think it's really important not just to consider the companies one invests in, but also the country, the macroeconomic situation, the political situation, and the value of the currency of the country, one's investing in.

We think the biggest opportunity in the region is domestic Brazil. Brazil is an economy that's quite sensitive to interest rates. We are seeing interest rates come down across the region. But we think the positive impact of that will be most pronounced in Brazil.

In addition to that, the stocks trade on quite cheap multiples at the moment because the locals are still quite pessimistic, which we think is an opportunity

I think that we're at a unique point in the region, a place that I've looked at for over the last 35 years. Macro, economically, you have inflation coming down, interest rates coming down

Also, it still provides all the natural resources that the world needs, the food that the world needs. And I think that this fund in particular is a boots on the ground investment trust that gives individual investors a way to participate in this region's long-term opportunities.

we're really excited by Latin America today for the simple reason that we can find a range of companies across so many different countries, in different sectors that are growing fast, taking market share, but more importantly, are at a price that cannot be found elsewhere in the world. Most of the companies in Latin America are cheap compared to their own history, and very cheap compared to similar companies elsewhere

And as a result, we find that combination really compelling.

Risk Warnings

Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Reference to the names of each company mentioned in this communication is merely for explaining the investment strategy, and should not be construed as investment advice or investment recommendation of those companies.

BlackRock Latin American Investment Trust specific risks

Counterparty Risk: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Fund to financial loss.

Currency Risk: The Fund invests in other currencies. Changes in exchange rates will therefore affect the value of the investment.

Emerging Markets: Emerging markets are generally more sensitive to economic and political conditions than developed markets. Other factors include greater 'Liquidity Risk', restrictions on investment or transfer of assets and failed/delayed delivery of securities or payments to the Fund.

Gearing Risk: Investment strategies, such as borrowing, used by the Trust can result in even larger losses suffered when the value of the underlying investments fall.

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