Latin American Credit – Value Refuge in an Inflationary Evironmemt

The global economy navigates through uncertain waters as we face high prices for commodities and the beginning of a hiking cycle by the Federal Reserve. Current geopolitical events in Eastern Europe have pressured prices of commodities, especially grains and energy, which have fueled inflationary concerns globally. These geopolitical events have also reduced the available investable emerging market universe due to sanctions applied on Russia. Moreover, they came after the Chinese government’s market interventions last year that affected the domestic real estate sector that holds over 60% of the high yield Asian index. Both events highlight two of Latin America’s strengths: democracy and peace. The region offers investors a geographical location far away from current conflicts and a political system that provides procedural institutions and transparency through debate and free press, despite sometimes having heightened political noise levels.