Latin America – 2019 In Review

Chile was the worst performer amid the political unrest the country underwent during the last quarter. No headline index was unscathed, and they all ended the quarter and the year in the red. Hardest hit were mid-cap stocks, as measured by the S&P/CLX IGPA MidCap, which lost 14% for the quarter. The banking sector was hit particularly hard, with losses of 21%, as measured by the S&P/CLX Banks Index. The S&P/CLX Utilities & Telecom Index surprisingly gained 7.5% for the quarter and nearly 16% for the year.

Mexico, the second-largest market in the region after Brazil, had a good year. Mexico’s flagship index, the S&P/BMV IPC, returned 1.2% for the quarter and 4.6% for the year. The S&P/BMV FIBRAS Index, which seeks to track the performance of the local real estate income trust stocks, and the recently launched S&P/BMV Ingenius Index, which is designed to measure 12 of the most innovative companies in the world trading in Mexico, each had returned over 40% for the year. For the quarter, the S&P/BMV China SX20 Index had the best return, up 10.8%.

Among factor indices in local currency, the S&P/BMV IPC CompMx Short-Term Momentum Index and the S&P/BMV IPC CompMx Quality Index (each with 15 stocks representing the top companies within each factor) had returns of 16.5% and 18.4% for the year, both with relatively low risk.

Argentina was the most volatile market in the region in 2019, mostly triggered by the extreme depreciation of the Argentinian peso, the continuous increases in inflation rates, and the uncertainty following the recent change in government. For the year, the S&P MERVAL Index returned 37.6% in ARS. The Argentinian market generated the highest volatility data of the region, as the three- and five-year risk rates based on standard deviation for the S&P/BYMA Argentina General Index were 42% and 38%, respectively.

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