Dare you tango with Invesco Perpetual Latin American?

"For investors brave enough to withstand short-term volatility and appreciate the longer-term benefits Latin America has, the potential future rewards may be significant," he says. "The region has an abundance of hard raw materials, basic and precious metals and oil, and when added to the massive production of agrarian and soft commodities, and continuing dependence on them, the investment opportunity becomes easier to understand. Based on population growth and the expansion of economies such as China and India, the thirst for these commodities will only continue to grow, albeit at a potentially slower rate than previously witnessed."

Read more on the case for Latin America

A good way to get exposure to Latin America is Invesco Perpetual Latin American Fund (GB0033027706). This fund is well ahead of its benchmark, the MSCI EM Latin America Index, over one, three and five years, as well as the average open-ended fund return in Morningstar's Latin America Equity category. Even over periods when the index hasn't done so well, you would have benefited from Invesco Perpetual Latin American's investment team's stock-picking skills.

The fund focuses on companies orientated towards domestic growth, and by investing in retailers, property and service companies, as well as healthcare providers, it gets exposure to the consumer sector. The fund's investment team prefer companies that operate within the logistics and transportation sectors, particularly in Brazil, and it has significant holdings in mid-cap companies as they believe this area offers some of the most attractive opportunities.

The fund typically holds between 50 and 60 stocks. Fund manager Dean Newman combines elements of stock-picking, seeking those investments that exhibit strong fundamentals, while also considering the broader economic environment in his decision-making process.

Invesco Perpetual Latin American remains overweight Brazil versus the MSCI Latin America index benchmark and has significant holdings in Mexico. But it also holds companies that operate in some of the region's smaller economies. For example, in June it added Grupo Televisa, a Mexico-based company engaged in television broadcasting, and in May, Masisa, a Chilean wood products company.

Mr Newman, who is head of emerging markets equities at Invesco Perpetual and has worked in investment for 28 years, has run the fund since launch in 1994. He became Invesco's head of emerging markets equities in April 2007, having joined the company in 1993, and the emerging markets equities team in 1994.

The fund also has a reasonable total expense ratio (TER) of 1.75 per cent in view of the fact that it is a specialist sector fund.

Regionally-focused funds are more concentrated - for example, this fund has nearly two-thirds of its assets in Brazil - and are therefore potentially more volatile and higher risk than funds with a broader focus. This is even more the case if, like Invesco Perpetual Latin American, the fund invests in emerging markets, and while Invesco Perpetual Latin American makes good cumulative returns, in the short term it can be volatile.

But if you have a high risk appetite and long-term investment horizon, then this top performing fund with a reasonable charge could be a good addition to your emerging markets exposure. Buy.

Read more on Latin American funds

See our report on Brazil ETFs

Source: Morningstar & *Invesco Perpetual

Morningstar as at 16 July 2013

Top 10 holdings as at 31 May 2013

Geographic breakdown