<div id="readability-page-1"><div>Latin American assets have emerged as a haven for emerging-market investors trying to navigate an increasingly volatile global backdrop, buoyed by a roster of oil exporters and greater insulation from tensions in the Middle East.Currencies across the region, from Brazil’s real to Argentina’s , are among the few in emerging markets that have strengthened against the dollar since the start of the war in Iran. Dollar bonds from oil-rich Ecuador and Colombia have ranked among the top performers in the span, as has Colombia’s local-currency debt. The US and Iran’s failure to strike a peace deal over the weekend is on market sentiment and lift demand for safe haven assets on Monday. With limited visibility on whether a ceasefire agreement reached last week will hold, traders have been expecting Latin American bets holding up under multiple scenarios. “Our highest conviction trades have been centered around Latin America,” said , a senior emerging markets portfolio manager at RBC Bluebay in London, citing Argentina, Brazil and Colombia as examples. “Targeting sovereigns and corporates that either benefit from, or at least are more resilient to, higher energy prices remains one of our preferred themes.”The view is shared by , who helps oversee $44 billion in global fixed-income assets at Brandywine Global Investment Management. He has been holding an overweight position in emerging-market assets, primarily through Latin America.“That region will benefit from the diversification of energy sources by Asian economies, as well as renewed interest from the US,” said McIntyre, who has been favoring local-currency bonds.The political alignment of some leaders with the Donald Trump administration has shaped how EM portfolio managers , with a more hands-on US stance — the capture of Venezuela’s Nicolas Maduro, the pressure campaign on Cuba — expected to have implications for credit markets.On top of that, Latin America boasts some of the world’s highest real interest rates, making it an attractive destination for , who borrow in one currency with low rates and invest in another with higher ones. BlackRock Investment Institute is positive on hard-currency emerging-market bonds, noting a key index “skews toward Latin American commodity and energy exporters.” The firm also likes Latin America stocks tied to themes such as rising demand for critical minerals driven by artificial intelligence, strategists including wrote in a note. Equities too are outperforming EM peers. An MSCI gauge of Latin American stocks is up about 3% since the war began, bucking losses of about 4% in the broad gauge for developing-world shares. “Debt flows turned negative at -$2.2 billion, but equities still attracted $1.4 billion, suggesting that commodity support and relative carry appeal continued to cushion the region,” according to , senior economist at the Institute of International Finance.Outflows from Latin America made up less than $1 billion of a total of $70 billion withdrawals from emerging-market assets in March, according to data by the organization.Still, vulnerabilities remain. Brazil’s high interest rates continue to corporate balance sheets, pushing more and more companies into distress. Investors face coin-flip presidential elections with binary outcomes in several countries. Colombia recently had its credit score on fiscal concerns, while Chile — an energy importer — saw its currency and bonds lag. “There are winners and losers in the region,” said , an emerging markets debt portfolio manager at AllianceBernstein. “Oil prices are likely to stay high even with the ceasefire holding, so the oil exporters are the bigger winners,” said Butt, who favors sovereign debt from places including Colombia, Argentina and Panama. Earlier this month, the International Monetary Fund emerging markets have become more vulnerable to shifts in global risk sentiment due to its increased exposure to funding from non-bank institutions such as pension funds and hedge funds. In the short term, the unwinding of hedges has sparked sharp rallies across the asset class, but RBC BlueBay’s Kettle remains cautious about taking longer-term positions until there is clearer evidence the ceasefire will hold and lead to broader de-escalation.“One key takeaway from the last few weeks of performance is that geopolitical shocks create real dispersion within EM,” Kettle said.</div></div>

EMGF

Latin American assets are attracting emerging-market investors amid global volatility, particularly due to oil exports and relative stability from Middle Eastern tensions. Currencies like Brazil's real and Argentina's peso have strengthened against the dollar since the Iran war began. Dollar bonds from Ecuador and Colombia have performed well, and local-currency debt in Colombia has also seen gains. Despite some vulnerabilities, such as high interest rates in Brazil and political uncertainties, the region is favored for its high real interest rates and potential benefits from energy price resilience.

Oil-Rich Latin America Lures Traders Navigating War Jitters