Where are you?
  • Austria
  • Belgium
  • Denmark
  • Finland
  • France
  • Germany
  • Guernsey
  • Ireland
  • Italy
  • Jersey
  • Luxembourg
  • Malta
  • Netherlands
  • Norway
  • Portugal
  • Spain
  • Singapore
  • Sweden
  • Switzerland
  • United Kingdom
  • Rest of World
It looks like you’re in
Not your location?
And finally, please confirm the following details
I’m {role} in {country} and I agree to comply with the terms of the website.
You are viewing as from Change

Liontrust Latin America Fund

Q3 2022 review
Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.

The Liontrust Latin America Fund returned 12.3% during the quarter, compared with a return of 12.7% for the MSCI EM Latin America Index and the IA Latin America sector return of 13.7% (both comparator benchmarks)*.

The third quarter continued and even amplified the well-established negative trends predominant in 2022 so far. Equity markets suffered ongoing losses across the board, taking year-to-date dollar returns to -27% and -29% for developed and emerging markets respectively. The key macro dynamics remain the relentless rise in global interest rates in order to respond to high and rising inflation across the majority of economies. The rise in US interest rates in particular, along with the prevailing cautious economic outlook, has also served to push the US dollar higher, which has in turn seen currency weakness across both emerging and developing markets, exacerbating the inflation and interest rate cycle.

Latin American markets resumed their outperformance during the third quarter, the 12.7% return of the MSCI EM Latin America Index being well ahead of the -3.8% and +2.1% of MSCI Emerging Markets and MSCI World, respectively. Returns were strongest in Brazil (+14%) and Chile (+13%), while Mexico and Peru also managed positive returns. However, sterling returns were flattered by the sharp depreciation of the pound. In US dollar terms, global developed and emerging equity markets suffered losses across the board as the well-established negative trends of the year so far continued.

In Brazil, attention was focused on the final campaigning ahead of the first round of the presidential election on October 3. Polls had suggested that Lula might win in the first round by achieving over 50% of valid votes, but ultimately he and current president Jair Bolsonaro will go to a second round on October 30.

Markets reacted positively to the first-round results for a number of reasons. Firstly, Bolsonaro did better than expected. This has modestly increased his chances of being re-elected but, more importantly, is also likely to force Lula to shift further towards the centre in the coming weeks as the candidates continue to campaign ahead of the second-round run-off. Secondly, the elected congress was more heavily weighted to the centre and centre-right than had been forecast. This will make it harder for the next president to implement any unorthodox or disruptive policies. Lula is still the firm favourite to be elected in the second round and so attention will now turn to additional details on his fiscal policies and planned reforms, as well as the potential naming of some ministers.

Despite the weakness in global markets and the increased economic anxiety, earnings expectations for Latin American companies remain strong. During the first three quarters of the year, earnings estimates were revised 32% and 13% higher for 2022 and 2023 respectively, led by the materials, energy and financials sectors. It seems that the recent weakness in commodity prices reflects investors de-risking on fears of a hard landing rather than a sharp deterioration in fundamentals. A recession will clearly negatively impact demand for many commodities, but limited new supply and thin inventories is likely to keep fundamental balances tight over the medium term.

With share prices lagging the upwards revisions to earnings, the MSCI Latin America Index is now trading at just 6.5x 2022 earnings, a 38% discount to the broader emerging markets. Recession fears could continue to weigh on regional and global equities through the months ahead, but relative and absolute valuations are already at extreme levels suggesting significant risks are already priced in.

Discrete years' performance (%), to previous quarter-end:







Liontrust Latin America C Acc GBP






MSCI EM Latin America






IA Latin America












*Source: FE Analytics as at 30.09.22.

**Source: FE Analytics as at 30.09.22. Quartile rankings generated on 07.10.22

Understand common financial words and terms See our glossary

Past performance is not a guide to future performance. The value of an investment and the income generated from it can fall as well as rise and is not guaranteedYou may get back less than you originally invested.

The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.

Investment in the Fund involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The value of fixed income securities will fall if the issuer is unable to repay its debt or has its credit rating reduced. Generally, the higher the perceived credit risk of the issuer, the higher the rate of interest.


This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID), which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. Always research your own investments. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances.

This should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets. It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, forwarded, reproduced, divulged or otherwise distributed in any form whether by way of fax, email, oral or otherwise, in whole or in part without the express and prior written consent of Liontrust.

Global Fundamental

Related commentaries

See all insights
Fund updates
Liontrust Latin America Fund Q4 2023 review
icon 23 January 2024
Commentaries Global Equity
Fund updates
Liontrust Latin America Fund Q3 2023 review
icon 17 November 2023
Commentaries Global Equity
Fund updates
Liontrust Latin America Fund Q2 2023 review
icon 24 July 2023
Commentaries Global Equity
Fund updates
Liontrust Latin America Fund Q1 2023 review
icon 25 April 2023
Commentaries Global Equity
Fund updates
Liontrust Latin America Fund Q4 2022 review
icon 30 January 2023
Commentaries Global Equity
Fund updates
Liontrust Latin America Fund Q3 2022 review
icon 24 October 2022
Commentaries Global Equity