The S&P Latin America 40 is a stock market index that tracks the performance of 40 leading blue-chip companies in Latin America. This index includes some of the largest and most liquid companies across five key Latin American markets: Brazil, Mexico, Chile, Colombia, and Peru. As such, it serves as a key benchmark for investors seeking exposure to the economic growth and corporate performance in the region. It is also one of the seven indices that make up the S&P Global 1200.
The index covers a range of sectors, including financials, energy, consumer goods, and materials, which makes it an essential tool for gauging the region's economic health.
The S&P Latin America 40 is a market capitalisation-weighted index. Launched in September 1999, it has become one of the most followed indices in Latin America.
S&P Latin America 40 Price & Chart
The S&P Latin America 40 has experienced volatility throughout 2024 and over the last few years as a whole. It is influenced by global economic conditions and regional political developments. Despite these challenges, the index has shown some signs of resilience.
S&P Latin America 40 – Daily Movers
S&P Latin America 40 Price Forecast
The S&P Latin America 40 Index provides potential opportunities as well as risks for investors to consider. Its performance is closely linked to the economic and political environments in Latin America, which can be both dynamic and unpredictable.
Bull Argument: The S&P Latin America 40 includes some of the region's strongest and most influential companies, many of which are leaders in sectors such as energy, finance, and materials. With the region's abundant natural resources and growing consumer markets, there is significant potential for growth. Furthermore, when assessing the technicals, we can see the index recently made gains from crucial support levels. This could result in further upside in the short to mid-term, especially if the global economic outlook becomes more positive.
In an article, BlackRock said that over the long term, there are factors that suggest long-term strength for Latin America. “They should be a beneficiary of deglobalisation: the disruption to supply chains experienced during Covid has seen many US companies bring manufacturing closer to home and hold higher inventories as they recognise the vulnerability of long, complex, cross-border supply chains,” explained the firm.
Bear Argument: Of course, as we have seen with the index and companies included over the last few years, the S&P Latin America 40 also faces headwinds that will impact its performance. Economic instability, political unrest, and currency fluctuations are common challenges in the region. Additionally, the index is sensitive to global commodity prices, particularly oil and metals, which can impact the performance of companies within the index.
S&P Latin America 40 Top 10 Companies
The index is rebalanced quarterly in March, June, September and December.
| Company | Market Cap (As of August 31, 2024) |
|---|---|
| Vale S.A. | $45.86 Billion |
| Nu Holdings | $71.69 Billion |
| Petrobras | $97.59 Billion |
| Itau Unibanco Holding | $61.14 Billion |
| Fomento Economico Mexicano | $183.88 Billion |
| Grupo Financiero Banorte | $19.73 Billion |
| America Movil | $51.13 Billion |
| Walmart De Mexico | $55.47 Billion |
| Grupo Mexico | $39.85 Billion |
| Petrobras SA Preferred ADR | $97.59 Billion |
Top 5 Constituents
Who Should Buy the S&P Latin America 40
The S&P Latin America 40 offers a distinctive opportunity for those interested in gaining exposure to Latin American companies. It may appeal to specific types of investors:
Latin American Economy Bulls: For investors who believe in the long-term economic prospects of Latin America, a fund tracking the S&P Latin America 40 may be of interest, providing a way to capitalise on its growth potential. Another angle for those specifically interested in Brazil would be the IBovespa.
Latin America Blue-Chip Stock Investors: The index comprises well-established, reputable companies in the region. The companies are generally leaders in their industries, making them suitable for those seeking stability and growth.
Resource Sector Enthusiasts: Many companies in the index are involved in natural resources, making it appealing to investors who are bullish on commodities like oil, metals, and agricultural products.
Risk Tolerance: While the S&P Latin America 40 offers exposure to large, stable companies, it is also susceptible to broader economic and political risks in the region. A high risk tolerance is advisable.
Timeframe: Given its performance over the last few years, the S&P Latin America 40 may be more suitable for longer-term investors who believe in the sustained economic growth of Latin America. It also offers opportunities for those looking to capitalise on specific trends within emerging markets.
Indices – Daily Movers