Latin American Markets Outperform S&P 500

LATIN AMERICAN MARKETS OUTPERFORM S&P 500

Latin American markets are accurately characterized as being among the riskiest capital markets in the world, but Latin American markets have outperformed the Standard & Poor's 500 over the last 20 years.

That's according to research by Christopher B. Barry, professor of finance, and Mauricio Rodriguez, assistant professor of finance, of Texas Christian University in Fort Worth. They researched the dynamics of emerging markets for the past 15 years and analyzed Latin American markets' performance as compared with the S&P 500 over the last 20 years.

"Most analysts only look at emerging markets for a 10 year period. Over that period, emerging markets are outperformed by the S&P, but when taken to a 20-year view, emerging markets actually outperform the S&P in U.S. dollars," says Barry. Their paper, "Risk, Return and Performance of Latin America's Equity Markets, 1975-1995," will be published in a forthcoming issue of Latin American Business Review.

Barry believes U.S. investors could be missing a prime opportunity to improve the risk vs. return characteristics of their investment and retirement portfolios by adding Latin American and other emerging market investments.

Latin America has produced higher compound rates of return than has the U.S. market. The outlook for investment returns continues to improve as certain debt securities achieve investment ratings, says Barry. Other factors that bode well for future investment in Latin America include increased privatization of industries previously held by government.

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Editors: Contact Barry at 817-921-7550 (office) For a copy of the study, please contact Steve Infanti of Dick Jones Communications at 814-867-1963. DJC helps TCU with its public affairs work.