Wealth Outlook 2024 - Slow then grow

124 Wealth Outlook 2024 | Regional outlook Latin America: potential opportunities amidst low valuations FIGURE 3 The MSCI Latin America Index trades cheaply relative to its historical relationship to earnings LATAM MSCI Index level LATAM MSCI earnings per share (USD) 3,000 2,000 1,000 100 0 200 300 NOV 16, 2023 Source: Bloomberg, Citi Global Wealth Investments Office of the Chief Investment Strategist (“OCIS”) as of November 16, 2023. The blue dot is the data point as of November 16, 2023 to present the relationship. The equation is the linear regression of the straight line on the graph. All forecasts are expressions of opinion and are subject to change without notice and are not intended to be a guarantee of future events. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. For illustrative purposes only. Past performance is no guarantee of future returns. Real results may vary. Our equity focus for a slightly longer investment horizon will be on the largest companies involved in the extraction of copper, lithium and other key industrial metals. With the prospect of lower interest rates (and the support that would provide growth, consumption and credit), consumer companies and Financials should also see a lift in the second half of 2024. E-commerce and fintech continue to be areas of high growth. Fixed income High nominal local rates in the 9–12% range, combined with lower currency volatility, improve the attractiveness of carry trades. At the same time, the deceleration in inflation has left locals earning attractive real rates. As of November 23, 2023, Latin America’s Bloomberg Local Currency Index, unhedged, was up around 22.80%. USD-denominated debt, which remains challenged by US interest rate levels and volatility, is up around 5% year to date (Bloomberg LATAM Sov+Corp Index). However, we believe that with US Treasurys yielding