From the economic powerhouse of Brazil, to the resource-rich countries of Chile, Colombia and Peru (the Andean Region), to rapidly growing Mexico, Latin America's five major markets are a strategic destination for money management. With more than $2.2 trillion in institutional assets, they are attracting the attention of asset managers and financial service providers around the world. The size and long-term growth prospects of these markets, as well as their concentrated number of increasingly sophisticated institutional investors, are among the reasons why these markets stand out.
Our new Vision report "Latin America's Major Five: Assessing the Opportunities" provides investors outside of Latin America with a high-level overview of the global and regional long-term trends shaping Latin America's major five economies and the opportunities they present. It also describes key considerations for entering into these markets, including the challenges that asset managers and investors face in doing so.
Trends Shaping the Major Five
Rising Demand for Commodities
The increase in demand for commodities around the world, particularly from China, is an important factor driving the growth of the major five. Copper, gold, oil, natural gas, iron ore, steel, silver and tin are among their most important exports.
Deepening Financial Markets
Increased overseas demand for the major five's debt and the growing prominence of their equity markets are among the factors propelling foreign capital into the major five.
While inflation was one of the greatest challenges facing the major five in the 1980s and 1990s, reaching more than 1,000 percent in some countries, by the end of 2010 it was largely under control, varying from just 0.5 percent in Chile to 5.0 percent in Brazil.