The recent Latin American electoral cycle has shifted many of its countries toward center-right and right-leaning governments, keeping the region in the investor spotlight over the past year.

Chile elected a right-wing administration in November 2025, followed by Colombia and Peru in mid-2026, according to Thiago Faganello, head of equity sales and partner at BTG Pactual. Ecuador and Bolivia also moved toward more market-friendly, center-right governments.  

“From a macro perspective, these political shifts have attracted investors’ attention, as markets generally perceive them as supportive of fiscal discipline, structural reforms, and private investment,” he said. “Historically, changes of this magnitude tend to improve market sentiment, encouraging capital inflows and creating new investment opportunities across the region.”

Investing successfully in Latin America is never an easy task, observed Adam Cherry, global head of Institutional Equity Sales at Itaú BBA. ”Investors deal with an ever-changing news cycle with those changes often happening intraday,” he said “However, 2025 provided an opportunity for investors who stuck with the region to outperform the broader emerging markets index.”

LatAm returned roughly +46% in dollar terms versus approximately +31% for MSCI EM, according to Cherry, while country and sector allocation were notable with Colombia (+97%), Chile (+67%), Peru (+66%) and Mexico (+50%) outperforming — and even Brazil (+40%) -- beating EM, leaving Argentina as the sole laggard.

“Financials, utilities, materials and consumer discretionary were the place to have gained alpha within the region,” he added. “It was a risk-on, rate-cut year: rate-sensitive and cyclical sectors led, defensives like Consumer Staples lagged.”