South America & Latin America: Exploring Economics

South America & Latin America contributes to the world economy in terms of natural resources, farming crops, and more. In this episode we explore the impacts and landscapes of the associated countries. Judith Casasampere, Institutional Sales at Interactive Brokers joins Cassidy Clement to discuss.

Summary – Cents of Security Podcasts Ep. 102

The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.

Cassidy Clement 

Welcome back to the Cents of Security Podcast. I’m Cassidy Clement, Senior Manager of SEO and Content here at Interactive Brokers, and today I’m your host for the podcast. Our guest is Judith Casasampere. She’s part of the institutional sales team at Interactive Brokers. 

South America contributes to the world economy in terms of natural resources, farming crops, and more. In this episode, we’re going to explore the impacts and the landscapes that are associated with the countries. 

Welcome to the program, Judith. 

Judith Casasampere 

Hello. Good morning. How are you? 

Cassidy Clement 

I’m great. So most people within IB will know you from our sales team and also from our IBKR Podcast en Español. But since this is your first episode on Cents of Security, why don’t you tell our listeners a little bit about your background? 

Judith Casasampere 

So, I’ve been at Interactive Brokers for over 20 years. I’ve been selling in Europe, I’ve been selling from here—from the United States—into the South American markets. And I have also been preparing almost 40 episodes of the IBKR Podcast en Español for our Spanish listeners, Spanish traders, and Spanish investors who want to know more about various aspects of the economy—especially from José Torres, who joins us every month to talk about economic data. 

But most of all, it has really been a good experience to work at IB. It gives me global exposure, and that’s one of the most important things I like to talk about. 

Cassidy Clement 

Essentially, this kind of spurred out of a lot of the hot topics in financial commentary and news. Tariffs are a very hot topic right now, so are certain types of goods and services, the impact on other economies’ spending, and of course, American economic spending. 

But today, we’re going to focus on the South American countries and their goods and services—what countries make up that larger economy. So what exactly are the main countries, if you could list them, that are part of the South American economy, and what are their main goods and services that they provide—not only to themselves, but to the rest of the world? 

Judith Casasampere 

One of the most important economies in Latin America would be Mexico, followed by Brazil. And then, besides these two core countries, we would go to Argentina, Chile, and—when it comes to the wealth management industry—we would also add other economies like Uruguay, or even Panama and Costa Rica as well. 

Costa Rica is an important economy, but it’s more on the services side. On the production side, let’s speak plainly—we have Mexico, we have Brazil, and I did forget (on purpose): Colombia and Peru. Colombia and Peru are also important when it comes to coffee and agricultural products, but not as much when it comes to industry or industrial-type products. 

Cassidy Clement 

When we look at South America, there are going to be many different market profiles—many different styles of economics, or the amount of wealth within the country, or the different types of commodities that come out of these countries. 

What exactly are the areas that people look at South America for in terms of growth? 

Judith Casasampere 

One of the most important things, obviously, from the countries in Latin America is their commodities. Right? Most of the countries—starting with Brazil, which is, as we said, the largest producing economy in Latin America, and going to Mexico and all these other countries—produce everything from wood to oil, to metals. 

Even in Chile—and you wouldn’t think about that unless you knew—all these minerals come from there. There are also a lot of resources coming from Argentina—soy, corn, and all these types of agricultural commodities as well. 

So they are really important and really strong when it comes to natural resources. Also, they have been really favored in the sense that they have a naturally good path when it comes to globalization—having closer contact with North America, with the U.S. 

So, everything that can be produced in Latin America and delivered to the U.S. more quickly benefits from this. In this situation, we can point to Mexico and all the factories that are there. Their economy is no longer just based on commodities—it’s now heavily based on industrialization, producing goods and sending them to the U.S. pre-tariffs. 

Now, let’s see what happens with tariffs being part of the economy—and a global economy, let’s say. 

Cassidy Clement 

Yeah, for sure. I think that a lot of countries contribute to day-to-day life items—coffee, fuel, different types of crops. Those things are really necessities for a lot of people, and it’s coming into a different context now. 

Most people—at least speaking from the American perspective—are starting to realize: “Oh, flip over the package. Where is this actually coming from?” It might be packaged in Kansas, but it’s actually coming from Argentina, or Colombia, or something of that nature. 

Maybe from an initial perspective, as people are listening and using deductive reasoning, it’s easy to say, “Okay, coffee. I know people drink a lot of coffee. I can go look for stocks associated with a Colombian coffee company.” 

But what are some other ways that investors can start to see securities that pertain to South America—or ways of gaining exposure—other than just direct stock? 

Judith Casasampere 

Obviously, there are a lot of ETFs traded in the U.S. that are focused on Latin America, and they invest in the strategic core products that these countries really produce. But there are also ADRs. ADRs, for instance, are the U.S.-issued replicas of strong stocks that are listed on domestic stock exchanges in Mexico, Brazil, Chile, and others. You can trade them in U.S. dollars, on U.S. exchanges, with good liquidity—and you can get direct exposure to really powerful companies in those Latin American countries. And I’m talking, for instance, about everything from Argentinian financial entities to Brazilian financial firms like Bradesco, or Petrobras—which is the oil company in Brazil. You could also look at SQM, which is the mineral company you mentioned in Chile, or other companies in Mexico. There are many companies you can trade. 

And even Interactive Brokers offers access—as of today—to the Mexican market directly. You can trade in pesos, or Interactive Brokers can receive money in Mexican pesos. That’s an exception, though. For other countries in Latin America, you can trade them from the U.S. market. 

Cassidy Clement 

When people are starting to look at a lot of this new exposure—especially if they’re new to international types of investment—what are some things to keep in mind? Initially, I may think of geopolitics, but what are some other critical thinking points to consider before you just incorporate it into your strategy? 

Judith Casasampere 

Most of these countries’ investments are typically made in conservative types of assets. When you think about the population in those countries, they often say they already have enough leverage within their own economies. Their economies are already subject to political swings, and they have strong currency swings—particularly against the dollar. So, whenever they look to invest, it’s usually in U.S. dollars and through more conservative strategies—things like bonds or mutual funds. They’re generally not looking for margin accounts or a lot of trading activity. 

Also, as you mentioned earlier, Cassi, due to the disparities, you’ll see a concentration of wealth among a smaller group of wealthy clients. Then, there are others who work hard and save—but typically through pension plans. Again, those savings are directed toward very stable types of investments. That said, there’s also a large younger population. There are many good universities across Latin America offering quality education, and many students are participating in our Student Trading Lab. 

We have strong collaborations with universities in Argentina, Mexico—even Chile—where students are trained on how to invest and build solid strategies. This new generation is much more interested in having direct access to trading. They have more of an active trader mindset. 

Cassidy Clement 

Yeah, that element of natural volatility within some of the local markets, as you said, drives a stronger interest in more conservative types of investment—or perhaps more introductory offerings that coincide with other currencies. 

But from your experience—and because you follow the market more closely than myself or others focused more on the U.S.—what are some trends you’re seeing in the South American countries? 

Judith Casasampere 

There are strategic industries, especially when we’re talking about wealth—which is what I deal with every day. I work with wealth managers, fund managers, and especially advisors or brokerage houses. These professionals are strategically deciding where they want money to go. 

Many of the companies we mentioned—commodities producers with strong sales—are generating a lot of excess liquidity that needs to be invested. Much of that investment flows into the U.S. 

Wealth management and advisory is becoming a key strategic industry. That includes model portfolios and the allocation of assets into financial markets. More and more people want to earn yields from their financial assets. 

Another area of strength is private equity—which we haven’t touched on yet. These economies know there’s a lot of capital being invested in natural resources, industry, and infrastructure, which they need in order to grow sustainably. 

So there’s significant local investment in these projects, and they often yield solid returns. 

Cassidy Clement 

On the educational front, you mentioned IB offers things like the Student Trading Lab. Are there other developments in those countries that are starting to show easier access or fewer barriers to entry? 

Judith Casasampere 

Yes—an important factor is the banks themselves. Banks are presenting clients with products that essentially discourage them from seeking options elsewhere. For an average Latin American client to gain international exposure, they usually need a significant amount of assets. Regular people generally don’t get direct access to international markets. The most they’ll do is convert their money into dollars—and that’s about it. And where they store those dollars? We don’t always know. Additionally, financial institutions charge high fees for transferring money abroad. 

Thankfully, we now have several fintech companies—can’t name names—but they’re helping. They’re providing competition to the banks and helping young people, or anyone wanting to break out of the traditional financial system, to access better investment options. 

Cassidy Clement 

Yeah, that’s great. I think it’s definitely positive to be able to level the playing field a little more—especially as the world becomes more interconnected, and the internet allows people to learn about all types of personal finance. 

It creates more financial freedom and opens the door to international investments. Definitely a good thing. 

Thanks for coming on today, Judith. 

Judith Casasampere

Thank you very much for your interest in Latin American countries—and I look forward to seeing you again. Thank you very much. 

Cassidy Clement 

Yeah, of course. As always, listeners can learn more about a wide array of financial topics for free at interactivebrokers.com/campus. Follow us on your favorite podcast network, and feel free to leave us a rating or review. Thanks for listening, everyone.