ILF ETF

ILF remains a hold due to compelling valuation but weak technicals, underperforming the S&P 500 despite favorable sector rebounds. The ETF targets large-cap Latin American stocks, focusing on growth and value, but assets have declined significantly since Q4 2023. ILF's portfolio now has more growth exposure with a low P/E ratio, but it needs bullish price action and sector support to upgrade.

The iShares Latin America 40 ETF (ILF) primarily invests in large-cap companies in Latin America, with a focus on Brazil and Mexico equities making up over 80% of the fund. The fund's largest sectors are financials and materials. Mexico is currently benefiting from trade tensions with China, leading to a positive change in its economy, resulting in a stronger currency and a thriving stock market.

iShares Latin America 40 ETF offers exposure to Latin America's potential high-growth ventures and established industries. The ILF ETF holds a diversified portfolio of 42 stocks, including top holdings in metals and mining, petroleum, and banking sectors. Investing in ILF provides diversification, potential for high returns, and accessibility to Latin American markets, but comes with market volatility, currency risk, and regulatory risk.

iShares Latin America 40 ETF has robust returns and relative strength compared to the S&P 500 in 2023. ILF has a high dividend yield and moderate expense ratio, but investors should be cautious due to volatility. ILF's portfolio is concentrated in large-cap value stocks, with a significant allocation in the Financials sector and Materials space.

Latin American stocks have been one of the better-performing international / value equity market segments YTD. ILF is a simple Latin American stock index ETF, sports a 7.1% forward yield, and a cheap valuation. A look at the fund, and some of its recent developments, follows.

The US Dollar Index reached its highest level since early July, which usually leads to lower commodity prices, but this time oil prices have remained high. The iShares Latin America 40 ETF has performed well, with a 6-month return of over 11%, but it has underperformed the SPX lately. ILF has a high dividend yield and a low forward P/E ratio, but it is not very diversified and has a high concentration in its top 10 holdings.

The growth trigger remains the recovery of the U.S. and Chinese economies as major trading partners. Most of the fund's companies are from cyclical or slow-growth sectors (materials, energy, financials). Regulatory risks are also present. The continent's growth forecast for 2023 is 0.6%.