Managers’ ambition to take more active positions has so far paid off…by Thomas McMahon



BlackRock Latin American (BRLA) is the only investment trust investing in the Latin American region that is rich in resources and potential. Managers Sam Vecht and Christoph Brinkmann use BlackRock’s deep resources and connections to identify the best growth opportunities in a set of countries which are benefitting from a number of secular themes.

Latin American equities have stood out this year as performing particularly well, and BRLA has added significant alpha to its benchmark index (see Performance). A key reason is the strong performance of domestically-focused Brazilian stocks, which the managers have overweighted for a number of reasons. Christoph joined Sam on the management team in September 2022 as part of a reshuffle, and the pair decided to increase the portfolio’s active bets versus the index. The outperformance this year reflects a promising start to this strategy.

Sam and Christoph think Latin America is particularly well placed compared to other global markets. The Brazilian central bank has started to cut rates, boosting economic activity and supporting equities, and they think other countries in the region will shortly follow suit. Meanwhile, foreign investment is high, thanks to the region’s ability to maintain economic ties with both America and China.

While the managers focus on outperforming the index on a total return basis, the board’s policy is to pay out 1.25% of the NAV in dividends each quarter, equivalent to a running yield of 5% on an annualised basis. To stick to this, they can use capital when necessary, but revenues have been so strong on the portfolio that this hasn’t been necessary in the past two years, and the trust has even paid a special Dividend.

BRLA trades on a Discount of 13.9% at the time of writing versus a five-year average of 10.8%.

Analyst’s View


Latin America has been overlooked by many investors for years, as China has attracted capital in the emerging markets universe, while near-zero interest rates have sucked money into speculative assets and equities. This is reflected in the only other investment trust focused on Latin America shutting its doors this year. As is often the way, we think this comes just as the region has really turned a corner, and its attractions are becoming increasingly apparent.

Real returns have become harder to come by, with Latin America one of the only regions to offer significantly positive interest rates as inflation has been tamed and rates are being cut. With inflation looking likely to remain a problem for years, the benefits of investing in commodity-rich economies are becoming clearer. Meanwhile, the geopolitical situation favours countries which can continue to take investment from China and the USA, while exporting to both. The proximity to the American market is a huge advantage in this respect, and the record levels of FDI seen in 2022 should pay dividends for years to come.

The emerging markets index remains heavily exposed to China and North Asia, and to get meaningful exposure to Latin America a specialist fund is likely to be appropriate. Sam and Christoph have a team dedicated to this particular area, which we think makes it a stand-out option. The active approach, use of gearing and the focus of the board on narrowing the discount in the long run mean the trust brings the advantages of the investment trust structure to bear on a region with great potential.





  • Region is well placed in the long term in terms of geopolitics and access to vital commodities
  • Offers a 5% annualised yield on NAV
  • An experienced management team with deep resources to draw on





  • Energy and commodity markets can be economically sensitive which could bring high beta in a global recession
  • Latin American markets and politics can be extremely volatile
  • Any gearing used brings greater exposure to falling markets, as well as rising markets


See the latest research on BRLA here >
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Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by BlackRock Latin American. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

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