Any approach you slice it, Latin American shares have been on hearth this yr. The iShares Latin America 40 ETF (ILF) has rallied greater than 25% in simply the primary half of 2025, far outpacing the S & P 500’s 5% acquire. Many nation particular benchmarks and ETFs are doing even higher thus far this yr (features via June 30 afternoon buying and selling): Brazil: Bovespa up 15%; EWZ ETF up 27% Mexico: S & P/BMV IPC index up 14%; EWW ETF up 29% Chile: S & P/CLX IPSA up 22%; ECH ETF up 25% Peru: S & P/BLV up 12%; EPU ETF up 23% Colombia: MSCI ColCap Index up 20%; COLO ETF up 25% These features come whilst commerce tensions have thrown the worldwide financial outlook into disarray, highlighting Latin America’s seeming resiliency. On high of that, many of those markets are buying and selling at historic reductions and are primed for robust progress in company earnings. Rising foreign money reserves “Latin American economies grew to become just a little bit extra boring within the final 10-15 years,” Mario Mesquita, chief economist at Itau Unibanco, the most important non-public sector financial institution in Brazil, instructed CNBC. “As they acquired [currency and gold] reserves, they adopted floating alternate charges, which act as buffers.” “It was once the case that when the world financial system slowed down, Latin America went into disaster. That is not the case,” Mesquita added. For instance, World Financial institution knowledge exhibits that Brazil’s whole reserves grew by 10% to about $319 billion between 2010 and 2024. Colombia had the largest enlargement in whole reserves in that point, surging 119% to just about $62 billion. Mexico, Chile and Peru noticed reserves develop by at the very least 59%. These have come in useful as protectionist tariff insurance policies from the U.S. threaten to drive international inflation greater. The U.S. on April 2 unveiled steep levies on imported items from different nations. This led main buying and selling companions, together with China and Canada, to retaliate with duties of their very own. President Donald Trump later delayed the implementation of most of the tariffs to permit the U.S. to barter with different nations, however a number of greater levies nonetheless stay in place. “That has implications for Latin America, particularly for Mexico,” mentioned Mesquita. “South America outdoors Colombia is rather more uncovered to China. So, the affect of the commerce conflict in South America is oblique, largely via its affect on the Chinese language financial system.” The inventory market outlook for the area, nonetheless, can also be supported by still-cheap valuations and the prospect of sharp earnings progress this yr. Brazil’s Bovespa index trades at about 8.4 instances ahead earnings, nicely beneath a historic common of 10.7, Financial institution of America knowledge exhibits. Mexico’s S & P/BMV sports activities a a number of of 13, beneath its common of 14.2$ foing again to 2010. Chile, Peru, Colombia and Argentina additionally commerce at reductions relative to their historic common. A weaker greenback can also be boosting these markets in 2025. The greenback index is down 10.6% yr thus far, making it cheaper Latin American nations to finance dollar-denominated debt. It additionally makes it simpler for shoppers in different nations to purchase items which are bought in {dollars}. What’s extra, inventory market returns denominated in native foreign money are extra worthwhile when translated again into {dollars}. Ought to the U.S. foreign money keep below stress, Latin American markets are more likely to profit, particularly Brazil. “Below the Trump administration’s aggressive commerce insurance policies, the greenback is going through renewed stress as nations more and more look to de-dollarize,” 22V Analysis strategist Jordi Visser wrote. “Brazil is on the forefront of this shift. Bilateral commerce with China is now settled in [Brazilian real and Chinese renminbi], and the BRICS bloc is constructing frameworks for local-currency settlements,” he mentioned, referring to the Brazil, Russia, India, China, and South Africa buying and selling bloc. “Brazil stands on the epicenter of a robust international reordering. Whereas most buyers stay preoccupied with tariffs, U.S. recession danger, inflation, and long-duration bond dangers, Brazil has quietly develop into some of the compelling macro alternatives of 2025,” Visser mentioned in a notice final month. Easy methods to play it For U.S. buyers on the lookout for publicity to those markets, essentially the most simple strategy to play it’s via the ETFs talked about above. This is how a lot every fund prices in charges: EWZ: 0.59% EWW: 0.50% ECH: 0.60% EPU: 0.59% COLO: 0.62% There are a number of particular person shares buyers can purchase that commerce within the U.S., equivalent to MercadoLibre , which Itau head of fairness technique Daniel Gewehr likes. For these capable of buy home shares, Gewehr highlighted names tied to Brazilian infrastructure, Mexican and Chilean financials, in addition to shopper staples in Mexico. Total, nonetheless, he is broadly bullish on Latin America. There is a “excellent chance within the subsequent 12 months that Chile, Peru, Colombia, Mexico, Brazil have rates of interest discount … That is good, as a result of that helps foster earnings,” he mentioned at Itau’s convention in New York in Might. Company earnings all through the area can develop at about 15%, Gewehr mentioned. “It is a double-digit progress for a single digit valuation” in Brazil, Latin America’s largest financial system, and elsewhere within the area, the place shares promote at about 9.5 instances future earnings, or nearly a 20% low cost to the historic common, he added.