iShares S&P Latin America 40 Index (NYSEArca: ILF). ILF is the largest of the two ETFs, with $2.6 billion in assets. The ETF tries to reflect the performance of companies in the Mexican and South American equity markets in the S&P’s Latin America 40 Index. The fund has 34 holdings and has an expense ratio of 0.50%.
- Top holdings include: Vale Sa ADR at 12.22%, Banco Itau Holding 11% and America Movil SAB 9.8%.
- Top sector allocations: Materials 26.6%, Financials 23.7%, Consumer Staples 11.8%, Telecommunications Services 11.6% and Energy 11.5%.
- Top country allocations: Brazil 58%, Mexico 22.6% and Chile 13.3%.
SPDR S&P Emerging Latin America (NYSEArca: GML). GML has $197 million in assets and tries to reflect the performance of the S&P Latin America BMI Index. The fund has 102 holdings and has an expense ratio of 0.60%.
- Top holdings include: Vale S.A. 5.9%, Petrol Brasileiros 5.8% and Itau Unibanco HOld 4.9%.
- Top sector allocations: Materials 26.7%, Financials 18.9%, Consumer Staples 14.1%, Energy 13.01% and Telecommunications Services 9.00%.
- Country allocations: Brazil 65.9%, Mexico 18.9%, Chile 10.8% and Peru 4.4%.
Both funds are heavily weighted in materials, which is one of resource-rich Latin America’s most important sectors. Both funds are also nearly entirely composed of large-cap, international corporations.
To choose, consider how much exposure you’d like to Brazil (GML is slightly more heavily weighted) and how comfortable you are with exposure to financials – ILF has 23.7% vs. GML’s 18.9%. [Emerging Market Bank ETFs Emerge Stronger.]
For more information on Latin America, visit our Latin America category.
Max Chen contributed to this article.