Like rival Latin America regional offerings, FLN is Brazil-heavy. The region’s largest economy represents 61.8% of the ETF’s weight, or more than 600 basis points above the allocation to Brazil found in ILF.
FLN also features an allocation to Colombia that is nearly 300 basis points above ILF’s. However, the First Trust ETF features no exposure to Peru, but its iShares and State Street rivals do. [Peru’s Pleasant Surprise]
FLN tracks the Defined Latin America Index, a derivative of the S&P Latin America BMI universe. Over the past year and three years, the Defined Latin America Index has outperformed the S&P Latin America BMI Index and the MSCI EM Latin America Index, according to First Trust data. However, FLN has a three-year standard deviation of 23.6% and a negative Sharpe Ratio over that time.
First Trust Latin America AlphaDEX Fund
Tom Lydon’s clients own shares of ILF.