For investors, it was the diversity of the Latin American markets—from differing domestic and economic policies to disparate election cycles—that remained a source of strength in the region this year.
“Latin America continued to be a market where dispersion created opportunities,” according to Carlos Sequeira, head of research at BTG Pactual.
While there are similarities among the countries in the region, the different domestic policies and, notably, electoral cycles created these unique opportunities this year for investors. “In our view, this reinforced the importance of country and stock selection,” he added. “Positive outcomes in presidential elections in Chile, Peru and Colombia boosted the performance of these equity markets in the past year. This year, Brazil’s presidential elections are the main highlight, while in 2027 we have presidential elections in Argentina.”
Latin America remained a stock picker's market, confirmed Thiago Macruz, head of research at Itaú BBA. “While the region underperformed broader emerging markets due to its limited exposure to the AI and semiconductor value chain, returns within Latin America were highly differentiated, driven by distinct country and sector stories.”
The North Andean markets of Colombia and Peru were among the region's bright spots, supported by improving macro conditions and renewed investor interest in commodities. Argentina continued to perform as the reform agenda gained credibility, with the energy sector emerging as a compelling investment theme.
Brazil combined resilient corporate fundamentals with persistent fiscal uncertainty, reinforcing the importance of bottom-up stock selection over macro calls—with energy, financials, and utilities/infrastructure explaining the key part of year-to-date performance, Macruz reported.
Mexico underperformed as weaker consumer demand and a softer domestic economy weighed on earnings expectations, while Chile lagged amid downward GDP revisions and weaker domestic activity, despite remaining a compelling long-term structural story given its leadership in copper and the energy transition.
“Across the region, investors consistently rewarded companies that delivered resilient cash flow, earnings upside, and strong execution, particularly those exposed to structural themes such as commodities, infrastructure, and energy,” he said. “The main headwinds remained fiscal developments. Latin America remains an important diversifier to EM's concentrated AI exposure—and can benefit indirectly from secular productivity trends.”
The mood in the region changed sharply with the start of the Iran conflict earlier this year, according to Rodolfo Angele, head of LatAm Equity Research at J.P. Morgan. “Oil spiked toward triple digits, and the knock-on jump in global (and local) rates pressured equities even as elections in places like Chile, Peru, and Colombia read as broadly constructive,” he said “Tariffs were the other speed bump and were uneven in impact. Mexico felt it most—capex slowed amid uncertainty and USMCA questions—while Brazil’s hit was more sentiment/politics than direct economics.”
The defining characteristic of the year was that investors increasingly looked at Latin America from a regional perspective while recognizing that local dynamics mattered more than ever, according to BTG Pactual’s Sequeira. “That made local presence and deep knowledge of political and economic environments more important than ever,” he said.
It also resonated with the voters of Extel’s 34th annual Latin America Research Team survey who once again recognized two firms with deep ties to the region: BTG Pactual and Itaú BBA share the No. 1 spot for the second year in a row.
The firms’ total team positions were unchanged from 2025 with 25 each. BTG Pactual captured 14 first team positions, and Itaú BBA netted nine. On the overall leaderboard, J.P. Morgan followed closely in third place with 23 total. BofA Securities closed the gap, earning 22 total team positions—up from 15—this year to take fourth place, and Bradesco BBI rounded out the top five with 17.
More than 940 directors of research and investment professionals at asset management firms with significant securities holdings in Latin America representing 520 firms weighed in on this year’s ranking. Participants rated their top firms in each sector and then separately rated individual analysts or economists/strategists at those firms to create two distinct rankings for each sector. The leaderboard was weighted based on a respondent’s commission spending.
The environment in Latin America this past year reinforced the value of differentiated research, and Sequeira credited his firm for taking up the call. “More than financials and modelling, in markets like Latin America, investors need research teams with deep knowledge of industries, companies, regulators and policymakers,” he said.
“What makes our platform unique is that we combine leadership in Brazil with one of the deepest locally based research teams across the rest of Latin America,” he added. “Our analysts live and work in the markets they cover—from Mexico and Colombia to Chile, Peru, and Argentina—which allows us to provide clients with both local expertise and a genuinely regional perspective. We believe that combination is increasingly valuable as investors allocate capital across Latin America rather than country by country. Being recognized as the #1 research team for the sixth consecutive year is especially meaningful because it reflects the consistency of our platform and the trust our clients place in our work.”
BTG Pactual has continued to expand thematic research, he added, helping clients identify opportunities that extend beyond traditional sector boundaries and increased collaboration across countries and sectors, reflecting how investors increasingly approach the region.
This was a year in which flows were led primarily by foreign investors—strong inflows in the first months of the year, followed by a partial reversal in the back half of the first semester, according to Itaú’s Macruz. “When foreigners drive the marginal flow, attention concentrates in the most liquid names,” he said.” That was a hallmark of this first half: investors gravitated toward larger, better-known stories, and consequently toward the most liquid stocks.”
At the same time, with high interest rates still pressuring corporate debt service, investors sought resilience: more predictable theses, stronger cash-flow generation. That translated into greater interest in energy, utilities, and financials and, on the domestic side, a particular focus on low-income housing.
For sell-side research, this raised the bar in two ways, according to Macruz. “First, when attention concentrates in a handful of liquid names, differentiation on those stories becomes everything—everyone covers them, so the edge is in depth, access, and non-consensus angles,” he said “Second, it created an opportunity in everything the flow ignored: helping clients identify the quality stories outside the liquidity sweet spot, positioning for the moment the rally broadens. Serving both demands at once — depth where the crowd is, discovery where it isn't — was the defining challenge of the year.”
Macruz said Itaú’s differentiation is less about any single product and more about the way they work. “We have a team that genuinely operates as one—and that's a real competitive advantage, not a platitude,” he said. “When one sector team develops an insight, a methodology, or a new way of serving clients, it's absorbed by the rest of the team almost immediately. Knowledge doesn't sit in silos; it travels.”
This has materialized concretely over the past year for Itaú, according to Macruz, showing up in collaborative, cross-sector reports that connect themes that no single analyst would capture alone as well as in product innovation: “When one team built proprietary data products tracking the indicators that matter most for their sector, the concept permeated the entire platform within weeks, and today that approach is embedded across our coverage,” he said. “That speed of internal diffusion means every good idea compounds across the whole team, not just one cell.”
This approach has become embedded in the firm’s culture, according to Macruz. “Rankings recognize individual analysts, but what sustains a top platform year after year is exactly this: a team where the learning of one becomes the strength of all,” he said.
When LatAm trades like a macro proxy, research has to do more than “tell the local story,” according to J.P. Morgan’s Angele. “Clients rely on the team to translate the big three (USD, rates, commodities) into what changes for flows, sectors, and stocks, with geopolitics, policy, positioning, and sentiment layered on top,” he said.
The firm believes it is differentiating on three fronts in 2026: client-led frameworks that map to real decisions, with fast scenario updates as conditions shift; modern production and distribution, using tech/AI and data-driven products to boost speed and consistency without losing depth; and one-team integration across macro, strategy, and fundamentals so clients get a single, connected view, scaled through joint publications, events, and tighter global coordination.
Looking toward the rest of the year, Latin America will continue to offer compelling opportunities, supported by attractive valuations and well-run companies, several with structural growth drivers,” according to BTG Pactual’s Sequeira. “As global investors look for diversification, the region remains well positioned to attract capital.”
For research providers, the challenge remains to deliver insights and differentiated ideas, he concluded. “Data is clearly abundant but differentiated analysis and local knowledge have become even more valuable,” he said. “In our view, firms with experienced analysts on the ground, broad regional coverage, and a collaborative research culture are best positioned to help investors navigate the region.”
