Summary

• The iShares Latin America 40 ETF invests in large-cap companies, primarily in Brazil, Mexico, and Chile.
• The ETF’s zero percentage allocation to the information technology sector makes it appealing for investors looking to hedge risks associated with AI valuations.
• ILF is overweight in cyclical sectors such as financials, materials, and energy, making returns more volatile and dependent on the economic cycle.
• While GDP growth for countries where ILF invests is forecast to go down in 2026, it remains robust at about 1.85%, only marginally below the United States.
• GDP growth falling short of expectations, currency risk, and governance/regulatory risks that come with emerging market stocks should be on the radar for investors.

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Introduction

In recent days, a bet by Michael Burry of Scion Asset Management on AI stocks such as Nvidia (NVDA) and Palantir (PLTR) going down in value has put renewed focus on the valuation of technology

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