LONDON (Alliance News) - Aberdeen Latin American Income Fund Ltd said Monday it outperformed its benchmark in the first half of its financial year, as government policies in Brazil and Mexico led a strong performance in Latin American equities.
Aberdeen Latin American's net asset value total return was 13.8%, compared to the composite benchmark index which returned 11.2%.
The composite benchmark index consists of the MSCI EM Latin American 10/40 Index, and the JP Morgan GBI-EM Global Diversified Index.
Net asset value per share as at February 28 was 78.22 pence, down from 84.47 pence the same date the year before, but up 9.2% from 70.34p.
The trust's share price at the end of February was 68.20p, reflecting a discount to net asset value of 12.8% from 13.6% the prior year.
Shares in Aberdeen Latin American were down 0.8% on the day Monday at 68.08 pence, having declined slightly since the period-end.
During the period, Latin American equities performed strongly despite a slowdown in global economic growth and US-china trade tensions.
In particular, economic and structural reform policies by the Bolsanaro government in Brazil buoyed investor confidence, while there was early optimism in Mexico from the preliminary US-Mexico-Canada trade agreement.
However, the cancellation of a multi-billion dollar project by the government of President Andres Manuel Lopez Obrador, based on a controversial referendum led to a sell off of Mexican stocks.
"Coming into the new year, the outlook for the global economy has somewhat improved with the possibility of the US-China trade spat being resolved soon. Despite this, investors remain nervous as GDP growth forecasts have been downgraded," said Chair Richard Prosser.
"Acknowledging this deterioration in the global economic momentum, the Fed responded with a wait-and-see stance and markets have cheered the prospect of a suspension in rate hikes for the first half of 2019. Emerging markets stand to benefit from this, as the pressure on their central banks to defend their currencies ease," Prosser added.