(Alliance News) - Aberdeen Latin American Income Fund Ltd said Thursday it outperformed its benchmark for its recently ended financial year, as regional markets were lifted on domestic events.
For the year to the end of August, the investment trust's net asset value total return was 22.4%, compared to its composite benchmark's return of 17.4%.
The fund measures itself against a composite benchmark index weighted 60% to the MSCI EM Latin America 10/40 index and 40% to JPMorgan GBI-EM Global Diversified.
Net asset value per share as at August 31 was 82.34 pence, up 7% from 70.34p the same date the year before.
Aberdeen Latin American's share price as at August 31 was 69.20 pence, reflecting a 16% discount to net asset value.
Shares in the trust were up 1.1% on the day Thursday at 72.36 pence, having improved further since the year-end.
Aberdeen Latin American said that markets in the region delivered strong returns in the period, mainly though domestic events despite global uncertainties and trade worries.
In particular, market sentiment in Brazil was lifted by the election of Jair Bolsonaro as president, raising hopes that the proposed pensions reforms would be approved.
Brazil alone brought the regional market into positive territory, despite Mexico being dragged down by trade war uncertainty, and a late decline by Argentina as primary election results gave left wing candidate Alberto Fernandez a stronger chance of winning the presidential race.
Aberdeen Latin American declared a dividend of 3.50 pence per share, in-line with the year before.
"I remain optimistic about the outlook for Latin American equities amid encouraging regional developments. Mexico was the first country to ratify the USMCA trade agreement - its final approval by the US and Canada could boost sentiment. Moreover, investors remain optimistic that Brazil's pension reform bill will be approved. President Jair Bolsonaro's administration has shown resolve in pushing for fiscal and structural changes," said Chair Richard Prosser.
"Such reforms, along with lower interest rates, are expected to attract investments and create jobs, which should fuel the economy. However, there is some room for caution amid weak global economic conditions and the ongoing trade war," Prosser added.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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