Wealth Shortlist Update: ASI Latin American Equity

We’ve taken the decision to remove the ASI Latin American Equity fund from the Wealth Shortlist.

We continue to have conviction in the Global Emerging Markets Equity Team at ASI (recently rebranded as ‘abrdn’), which manages the fund. However, we believe this specialist fund is not currently suitable for the Wealth Shortlist.

The Wealth Shortlist is designed to help investors build well-balanced and diversified portfolios. It aims to provide the building blocks to build a well-rounded long-term investment portfolio, to which additional funds can be added depending on an investor’s goals and tolerance for risk. Following research and discussion, we do not currently view specialist funds focused on Latin America as building blocks.

Latin America forms part of the broader global emerging stock market. However, global markets have evolved over time, and the proportion of Latin American companies that make up the emerging market has reduced in recent years, while other areas such as China have increased.

As the Latin American region is also focused on a more concentrated range of countries and companies, performance has tended to be much more volatile than the wider market. This is not to say the region, or the fund, doesn’t offer long-term performance potential. The market had a tough 2021 but has so far rebounded in 2022 and has the potential for further recovery. This is over a short timeframe though and demonstrates the potential for greater levels of volatility.

For most investors who are happy with the associated risks of investing in emerging markets, we think a broad global emerging markets fund is likely to be a good starting point. Most offer some exposure to the Latin American region, but they are run by fund managers who have the flexibility to increase or decrease investments in the region when they feel it’s appropriate and depending on where they find the best investment opportunities. Please note they will also invest in other emerging markets such as China, India, and Taiwan. Other funds could then be added to a portfolio for additional exposure to a particular theme, area, or country.

We continue to believe the ASI Latin American Equity Fund is one of the best for exposure to this region. The fund is managed by an experienced emerging markets team, with investment capabilities that have been built over several decades. If the fund continues to meet an investor’s investment objectives and attitude to risk, we see no reason to take any action. If you’re not sure if an investment is suitable for your circumstances, please seek advice.

Past performance is not a guide to the future. Source: Lipper IM to 31/01/2022.

Find out more about ASI Latin American Equity, including charges

ASI Latin American Equity Key Investor Information