Latin America's Investment Potential: Natural Resource Asymmetry and AI Growth

Emerging Markets Outperform in 2025

• 📈 MSCI's EM index achieved a 30% gain in 2025, surpassing both the S&P 500 and the Magnificent Seven.
• ⚠️ This growth occurred despite the persistent threat of US tariffs impacting key emerging economies.

China's AI Ecosystem and Infrastructure

• 🇨🇳 China's AI development is creating its own distinct ecosystems, focusing on low-cost inferencing models.
• ⚡ The country benefits from a digitized economy and abundant electricity, unlike power-constrained regions like the US.
• 🏭 This infrastructure supports a robust supply chain, servicing global AI ecosystems and benefiting from increased hyperscaler capex.

Shifting US Trade Policy and Nearshoring

• 📉 Concerns about US trade policy are diminishing, with a realization that onshoring all production is not feasible.
• 📦 Nearly 50% of US imports are intermediate goods, crucial for final production, suggesting continued trade flow.
• 🇲🇽 Initiatives like Mexico's nearshoring 2.0 and the USMCA are expected to provide tailwinds for North American trade.

Latin America's Geopolitical and Economic Appeal

• 🌎 The Western Hemisphere is seeing increased US attention, evidenced by reduced trade rhetoric with Brazil and aid to Argentina.
• 💎 A key driver for the region is natural resource asymmetry, with countries possessing rare earths and energy resources.
• 💰 Many Latin American countries benefit from high real interest rates and have room to cut rates, alongside commodity-linked GDP growth.