Sheridan Admans, investment adviser at The Share Centre, explains how investors looking for capital growth and exposure to Latin America, could benefit from the Threadneedle Latin America fund.
 
What makes Latin America attractive to investors is its abundance of raw materials such as copper, basic and precious metals, and oil. It is anticipated that as the world’s population grows, the thirst for these commodities will only grow further.
 
We have already seen an increased demand over the last decade, leading to some economies experiencing internal consumer demand and wealth creation. We have also seen improvements in the financial systems in countries such as Brazil. These factors make Latin America more appealing to investors.
 
The Threadneedle Latin America fund is an ideal way to invest within this region. We rate this fund as a higher risk investment for those who want exposure to Latin America and surrounding regions in a well diversified portfolio.
 
The fund has been managed by Julian Thompson since April 2009. Thompson also manages Threadneedle’s Global Emerging Market Equity fund and heads up a team of analysts that cover emerging market research across the globe.
 
The fund currently invests in 47 stocks, favouring large-cap companies. Its main focus remains the consumer-orientated sectors, which are likely to benefit from a strong recovery in the consumer credit cycle. The outlook for Latin America remains very positive. Threadneedle predicts earnings growth of over 30 per cent in 2010.
 
In terms of performance, the Threadneedle Latin America fund has returned 77.64 per cent over a 12 month period and 270.67 per cent on a 5 year cumulative basis; while year-to-date it stands at 9.32 per cent.
 
The fund has an annual charge of 1.50 per cent and an initial charge of 3.75 per cent. The minimum initial investment is £2,000. However, as the fund features in The Share Centre’s Platinum 120 range, customers wishing to invest in the Threadneedle Latin America fund will not have to pay the initial charge or purchase dealing commission. Customers can also invest in the fund from as little as £10.