Despite being one of this year’s weakest performers, BlackRock thinks Latin American stocks will emerge as winners when Europe stabilizes.

And no matter what happens in the world economy, the asset management giant says that as the region’s economies are by and large tied to its domestic markets, increasing disposable incomes can drive growth on their own. In Brazil for example, the continent’s largest country and economy, exports make up only about 10 per cent of GDP.

BlackRock is also confident that China will manage to engineer a gradual slowdown over the next decade, and minimize any major repercussions on equities in Latin America.

Brazilian stocks make up the dominant share of the BlackRock Latin American Investment Trust, but exposure has been cut from 80 per cent to 72 per cent since August. The remaining 28 per cent of the portfolio is invested in Mexico, Chile, Peru and Colombia.

Will Landers, the fund's manager, believes that the investment environment in Brazil will be enhanced by preparations for the 2014 World Cup and the Olympics in 2016. Landers also highlights the country's strong fundamentals including record low unemployment and ambitious infrastructure programs.