Latin America's 15% Year Beats the S&P 500 by Four Points
The iShares Latin America 40 ETF is up 15% year to date against 11% for the S&P 500, a gap Michelle Caruso-Cabrera says reflects the best regional tailwinds in decades.
CNBC contributor Michelle Caruso-Cabrera said the investing tailwinds for Latin America are the best in decades, citing the iShares Latin America 40 ETF (ILF), up 15% year to date against an 11% gain for the S&P 500.
A single equity fund has become the shorthand for an argument U.S. investors have spent most of the last decade ignoring: that Latin America can outrun the American market. The iShares Latin America 40 ETF (ILF) is up 15% year to date, against an 11% advance for the S&P 500 — a roughly four-percentage-point cushion in a year when U.S. large caps have been anything but weak.
Michelle Caruso-Cabrera, speaking on CNBC, framed the move as more than a rotation trade, saying the investing tailwinds for the region are the best in decades. That is a strong claim, and it is worth separating what the numbers actually show from what the thesis asserts.
What the fund's price tape says right now
ILF last traded at 35.04, down 1.16% on the day from a prior close of 35.45, with a session range of 34.91 to 35.30, as of the last trade on Friday, September 18, 2026 at 20:00 GMT. Markets are closed; that is the most recent print, not a live quote. The move works out to a decline of about 0.41 on the session — a modest give-back that leaves the year-to-date lead intact.
For comparison, the SPDR S&P 500 ETF Trust (SPY) closed at $761.69, off 0.12% from a prior close of $762.60, having traded between $757.97 and $762.00. The Nasdaq 100 proxy QQQ closed at $721.45, up 0.63%, while DIA finished at $515.88, down 0.48%. In other words, the final session of the week was mixed and unremarkable in the United States — the Latin America story is a year-to-date story, not a one-day one.
That distinction matters. A four-point spread built over nine months is the kind of gap that survives a bad Friday. It is also the kind of gap that a single quarter of currency reversal can erase, which is the central risk in any dollar-denominated emerging markets fund.
Why a regional ETF moves on things that are not earnings
ILF tracks a concentrated basket of the largest listed companies across Latin America. Unlike a broad U.S. index fund, where returns are dominated by corporate profit growth, a regional fund priced in dollars gives American holders three separate exposures stacked on top of one another.
- The underlying share prices, set in local markets and local currencies.
- The exchange rate, because those local-currency gains have to be converted back into dollars. A firming local currency amplifies returns for a U.S. investor; a falling one can turn a decent local year into a flat or negative dollar year.
- The commodity complex, because the largest index constituents in the region skew heavily toward resources, banking and materials rather than software.
Those layers are why "tailwinds" is the operative word rather than "earnings." When the dollar is not grinding higher against regional currencies, when policy rates in the region are falling from restrictive levels, and when hard-commodity prices are firm, all three layers can pull in the same direction at once. That alignment is rare, and it is the alignment a "best in decades" claim implicitly describes.
The valuation gap behind the rotation
The other half of the case is starting point. U.S. large-cap indices have been carried for years by a small group of very large technology and AI-linked names, which has pushed the index multiple well above the rest of the world. Emerging market equities, and Latin America in particular, have spent much of that stretch out of favor — under-owned by global allocators and priced accordingly.
When a market that cheap begins to work, the mechanics of flows do the rest. Regional ETFs are relatively small vehicles compared with the trillions tracking U.S. benchmarks, so even a modest reallocation out of a crowded American trade can move regional prices disproportionately. That is a feature on the way up and a liability on the way down; thin markets do not discriminate about direction.
It also explains why the outperformance narrative is arriving now rather than two years ago. Nothing in the lead establishes when the regional discount opened, and no specific valuation multiple has been disclosed here — but the shape of the trade is familiar to anyone who has watched capital rotate out of a concentrated winner.
The risks that are specific to this basket
Three things can unwind a year like this faster than they built it.
Currency. Because ILF returns are reported in dollars, a renewed dollar rally does damage that has nothing to do with the operating performance of the companies held. This is the most common way a good local year turns into a bad American one.
Politics and policy. Latin American markets carry election and fiscal risk that U.S. benchmarks simply do not price. Sovereign credit spreads, central bank independence and tax policy can reprice a whole market in days. Caruso-Cabrera's "decades" framing is a statement about the current configuration, not a guarantee of its durability.
Concentration. A 40-stock regional index is, by construction, a bet on a handful of very large companies in a small number of countries and sectors. It is not a diversified proxy for regional economic growth, and investors who treat it as one are usually surprised by which holding is actually driving their return.
What to watch from here
The immediate tell is whether the year-to-date spread over the S&P 500 widens or compresses through the fourth quarter. A gap that holds through a period of dollar strength would be a genuinely different signal than one that only exists while the dollar is soft.
Beyond that, three markers are worth tracking: the direction of regional central bank policy as inflation cools, the path of industrial and precious metals prices that flow directly into the earnings of the largest index constituents, and the pace of foreign inflows into regional funds. Sustained inflows into a structurally under-owned market is what converts a good year into a cycle.
For now, the arithmetic is straightforward and the interpretation is not. Fifteen percent against eleven is a real result. Whether it marks the front end of the best regional setup in decades, or a well-timed rotation that reverses when the dollar turns, is the question the next two quarters will answer.
Key facts
- ILF last close: 35.04, down 1.16%, as of Sept. 18, 2026, 20:00 GMT
- ILF year to date: Up 15%
- S&P 500 year to date: Up 11%
- SPY last close: $761.69, down 0.12% (prev close $762.60)
Frequently asked questions
How much is the iShares Latin America 40 ETF beating the S&P 500 by this year?
The iShares Latin America 40 ETF (ILF) is up 15% year to date, compared with an 11% gain for the S&P 500. That is a lead of roughly four percentage points built over the course of the year, and it is the figure CNBC contributor Michelle Caruso-Cabrera cited when describing the region's tailwinds as the best in decades.
What was ILF's most recent closing price?
ILF last traded at 35.04, down 1.16% from a prior close of 35.45, with a session range of 34.91 to 35.30, as of the last trade on Friday, September 18, 2026 at 20:00 GMT. That was a modest single-session decline and does not change the fund's year-to-date lead over the S&P 500.
What does the iShares Latin America 40 ETF actually hold?
ILF tracks a concentrated basket of roughly the largest listed companies across Latin America. Unlike a broad U.S. index fund driven mainly by corporate profits, its returns depend on local share prices, the exchange rate between local currencies and the dollar, and commodity prices, since the index skews toward resources, materials and banking rather than technology.
Why does currency matter so much for a Latin America ETF?
The fund is priced in dollars but holds securities that trade in local currencies. Gains made locally have to be converted back into dollars, so a strengthening local currency amplifies an American investor's return while a rising dollar can erase it. Currency is the most common reason a strong local year becomes a disappointing dollar-denominated one.
Who is Michelle Caruso-Cabrera and what did she say?
Michelle Caruso-Cabrera is a CNBC contributor who covers Latin American markets. Speaking on CNBC, she said the investing tailwinds for Latin America are the best in decades, pointing to the iShares Latin America 40 ETF's 15% year-to-date gain against the S&P 500's 11% as evidence that the region is handily beating the U.S. benchmark.
What are the main risks to the Latin America outperformance trade?
Three stand out. A renewed dollar rally can wipe out dollar-denominated returns regardless of company performance. Election, fiscal and central bank policy risk can reprice entire regional markets quickly. And a 40-stock index is highly concentrated in a few countries and sectors, so a single large holding can dominate returns in either direction.
