FII Flows: Not Korea or India, foreign investors are investing heavily in this country's stock market.: Traders also expect Brazil's central bank to begin cutting interest rates from its 20-year high of around 15% as early as March. Colombia is also facing a similar situation.

News Topical, Digital Desk : FII Flows: The current global investment scenario is witnessing a major shift. This time, foreign investors are increasingly turning not to Korea or India, but to Latin American stock markets. Foreign capital is flowing into the region's markets at the fastest pace in the past 10 years.

According to a Bloomberg report, the MSCI EM Latin America Index has jumped 20% so far in 2026, reaching an 11-year high. This rally was led by strong buying by foreign investors in the equity markets of Brazil, Colombia, and Mexico. Last Friday, the index closed with gains for the ninth consecutive week, its longest winning streak since 2017.

Latin American markets, particularly Brazil and Colombia , have been overlooked compared to other markets in particular, attracting investor attention ahead of their respective presidential elections. Investors are anticipating potential interest rate cuts and major changes to local policies. The US Supreme Court's decision to strike down former President Donald Trump's global tariffs has also fueled the region's rally.

Record Investments in ETFs: US-listed ETFs covering the region have also seen strong investment. BlackRock's iShares Latin America 40 ETF received over $1 billion in January alone, increasing its total assets under management (AUM) to $4.3 billion. Similarly, the iShares MSCI Brazil ETF, the largest US fund tracking the Brazilian market, recorded its strongest monthly investment in January in over a decade. Billionaire investor Stanley Druckenmiller's family office also increased its stake in the ETF, leading to a 17% increase in January. Betting on the Electoral Dynamics The market is also betting on the potential defeat of current Brazilian President Luiz Inacio Lula da Silva. According to Thierry Larose, portfolio manager at Vontobel, "We don't know who will win, but if the opposition wins, the potential for profit is higher, while if Lula stays, the risk is higher." Traders also expect the Brazilian central bank to begin cutting interest rates from their 20-year high of 15% as early as March. A similar situation exists in Colombia. Analysts believe that asset prices could rise if a right-wing party comes to power, while a left-wing victory could pose a risk of market decline. Although foreign investors are investing rapidly, local investors remain cautious due to political uncertainties.