abrdn Latin American Income Fund (ALAI) aims to provide investors with a total return and an above-average yield, primarily through investing in Latin American securities. While the portfolio is constructed without reference to any benchmark, the company measures its performance against a composite index (in £ terms): 60% MSCI EM Latin American 10/40 index and 40% JP Morgan Government Bond Index EM Global Diversified (Latin America carve-out).
Aberdeen Latin American Income Fund’s (ALAI) managers at Aberdeen Standard Investments (ASI) are encouraged by the prospects for Latin America. An economic recovery is underway and is spreading from the industrial to the service sectors as the COVID-19 vaccination programme in the region gains momentum. While inflationary pressures are building, the managers are hopeful that central banks’ monetary policies will ensure that these are temporary; for example, in Brazil, interest rates have already been hiked four times this year. The managers say that the Latin American stock market is supported by a strong earnings recovery, helped by higher commodity prices and attractive valuations. Their optimism is reflected in ALAI’s higher equity weighting, which now makes up around two-thirds of the fund.