The forward P/E on Mexican equities is 16.1 compared to 9.6 for their Brazilian counterparts, according to S&P Capital IQ. Part of the higher valuation on Mexican stocks is attributable to the market’s tilt toward defensive sectors. For example, EWW allocates nearly 39% of its combined weight to staples and telecom names, according to iShares data.

“Colombian shares also seem quite attractive to us despite being comparatively expensive. The Bolsa deValores currently trades at a premium to its South American rivals. Yet, its 2014 forward P/E is 18.1 points shy of its historical high (33.3x), making an expansion of its market multiple likely,” said S&P Capital IQ.

ICOL and GXG are both heavily allocated to Ecopetrol (NYSE: EC), Colombia’s state-run oil giant. Shares of Ecopetrol have a trailing 12-month yield of 7.5% while its Brazilian rival Petrobras (NYSE: PBR) yields less than 3%.

iShares MSCI Mexico Capped ETF

Tom Lydon’s clients own shares of ILF.