1 Mar 2022 07:00
London, UK, 1 March 2022
Edison issues review on abrdn Latin American Income Fund (ALAI)
abrdn Latin American Income Fund's (ALAI) managers at abrdn Capital International (abrdn) consider that Latin American equity and fixed-income assets are 'extremely inexpensive'. The region has underperformed both other emerging and developed markets in recent years despite commodity price strength, while the managers believe that Latin American political risk is already priced into the markets. They report that ALAI's portfolio has significant exposure to positive structural trends such as electrification. As an example, Chile and Peru are leading lithium and nickel producers and these materials are in high demand. The managers suggest that this trend could continue for many decades, given the long-term transition to a greener global economy.
ALAI is currently trading at an 11.6% share price discount to cum-income NAV, which compares with a range of 3.1% to 16.8% range of discounts over the last 12 months and an 11.2% to 13.2% range of average discounts over the last one, three and five years. ALAI's annual dividend has held steady at 3.50p per share for the last six consecutive financial years, drawing on revenue reserves when required, and the fund offers an attractive 6.7% yield.
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