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Stock Strategist

Three Moats from South of the Border

These Latin American stocks are shielded from some of the region's volatility.

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Latin America's equity markets have returned a roaring 275% since 2003, and by some measures remain undervalued. Still, the region is volatile and evolving quickly. How should an international investor best proceed?

By buying companies with fosos econ�micos, or economic moats. These firms have enduring advantages that keep competitors at bay and protect returns on invested capital. While we believe that businesses possessing moats make superior investments anywhere, they become especially attractive in less-certain markets such as Latin America.

Ryan McLean does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.