Itau Asset Management has just opened a Latin American equites fund up to the Australian investor market.
The fund called the Latin American Equities Strategy has initially been made available to institutional investors with the aim to attract retail investors as soon as it has received a research house rating.
The offering aims to invest in equity markets in countries such as Mexico, Chile, Peru, and Argentina with its largest weighting to listed shares in Brazil.
"There is exposure to emerging markets in Australia, it is exposure to Asia, but there is no exposure to Latin America and the thinking is that Latin America and Asia is more or less the same thing," Itau head of Latin America equity investments Scott Piper told InvestorDaily.
"We think there is a case to make for the region Latin America as a differentiating portfolio within emerging markets because there are certain aspects that exist in Latin America we think are quite different from Asia today."
"We also think the structure of the markets will change over time where you'll have a region with less volatility and higher multiples over time as they get more domestic participation from pension funds and a reallocation away from fixed interest to equities within Latin America as well."
To that end Itau is looking to invest in stocks outside of the traditional indices away from the large cap stocks in the region.
This means for example in the Brazilian market the fund will be concentrating on the smaller non-commodities sectors like infrastructure, financials, healthcare, and consumer oriented stocks.
"We think these are the kind of companies that are going to double and triple over size and gain more index representation," Piper said.
The fund was made available to wholesale investor two weeks ago and the investment team is looking for its inclusion on major platforms and dealer group approved product lists in the coming months.
Retail investors can expect to have access to the offering in July.
