The managers of BlackRock Latin America (BRLA), Ed Kuczma and Sam Vecht use BlackRock’s extensive resources to identify the best growth prospects in the Latin America region. The process leans on a mixture of proprietary macroeconomic research done by BlackRock’s large emerging markets team and stock specific research done by the team of four dedicated analysts focusing on the region. BRLA pays a dividend worth 1.25% of USD NAV each quarter - out of capital when necessary. This equates to c. 5% on an annualised basis, meaning the managers focus purely on identifying the best growth prospects. Ed and Sam believe the main markets of the region – Brazil, Mexico and Chile – are at an early stage of a period of cyclical growth which makes them attractive investments at this time. As discussed in the portfolio section, combining various advantageous domestic developments, they believe the region could be a major beneficiary of the stimulus-driven global recovery from the pandemic. This is partly through the commodity producers that should benefit from infrastructure spend expected in the US and elsewhere. In the longer run, governments have been increasingly committing to transitioning away from fossil fuels, which creates huge extra demand for metals used in electric vehicles and alternative energy production. BRLA also has exposure to companies benefitting from digitalisation and the growth of e-commerce. Having tilted the portfolio in this direction in 2020, as the pandemic spread, the managers have reduced this exposure and leant more towards commodities. BRLA’s portfolio now has a significant overweight to materials, including the producers of copper, lithium, iron ore and softer commodities such as paper and pulp. BRLA’s share price discount is 9.5%.