Continuing our series of articles examining funds, Andy Parsons, advice team manager at The Share Centre, looks at what the Invesco Perpetual Latin American fund has to offer investors.

With an abundance of raw materials such as oil and ore, and the world’s dependence on them, Latin America is an attractive proposition for adventurous investors attracted to emerging markets. 

Over the last decade, Latin economies have become wealthier as internal consumer demand for raw materials has grown and the region appears to be moving out of recession.

Brazil, for example, has recently cut its interest rates to an all time low of 8.75% and its unemployment is falling. And, while historically Brazil’s financial system has had to overcome a variety of issues, the IMF now describes its economy as robust. 

If you’re tempted to broaden your horizons and invest in Latin America, the Invesco Perpetual Latin American fund is the ideal way to gain exposure. The fund aims to achieve capital growth by investing primarily in shares of companies in South and Central America, including Mexico, and the Caribbean, as well as other Latin American-related investments.

The Invesco Perpetual Latin American fund invests in some of the most familiar companies in the region, its largest individual holdings being Petroleo Brasileiro, Vale and America Movil, and displays a healthy interest in a number of different sectors including financials, basic materials, consumer goods and telecommunications.   

The latest figures, published October 2009 for the period ending September 2009, reveal the fund comprises 55 holdings, with its top ten holdings accounting for 47.4% of its stock, and a total fund size of £262.69m.

Since its launch in 1994, the fund has proved to be a consistently strong performer having returned 256.19% compared to the sector average of just 61.03%; a remarkable feat which demonstrates the skill with which the fund is managed.    

For the past 15 years, the fund has been managed by Dean Newman, head of emerging markets at Invesco Perpetual. Dean began his investment career in 1985 at Legal & General where he covered the UK equities markets. In 1991, he moved to the Japanese bank, Sanwa, where he was head of UK equities before joining Invesco in 1993 as a member of its Global Emerging Markets team.

With regards to strategy, the fund has a particular focus on the consumer theme especially in Brazil where consumption has held up relatively well through the darkest days of the recent financial crisis.

Despite being seen as a region more attuned to oil and natural resources, investors might be surprised to find that the current largest sector holding is in financials. This is followed by basic materials, consumer goods and then oil and gas.

Due to the nature of the geographical region and the development of its financial markets, The Share Centre rates this fund as a high-risk investment. As with any investment, its value and any income will fluctuate over time so you may not get back the full amount you invested.

However, if you’re willing to accept the higher risk associated with exposure to Latin America and the surrounding regions and are looking for capital growth, the Invesco Perpetual Latin American fund could prove to be the right choice for you.

The maximum initial charge is 5 per cent and the annual management fee is 1.50 per cent. Interested investors will be pleased to know, the Invesco Perpetual Latin American fund features in our Platinum 120 funds range, so if you purchase the fund through The Share Centre there’s no initial charge to pay and no dealing commission.