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Latin American exchange-traded funds and the benchmarks they track have managed to stand out with impressive gains this year. The big two markets, Brazil and Mexico, followed by Chile, have already gleaned double-digit gains less than halfway through the year and have each set new record highs last week.

The iShares Latin America ETF (NYSEARCA:ILF) has 88% of its basket directed at Mexico and Brazil. Brazil has for some time been the most overweight country in global equity manager's emerging market portfolios. Strong exports, higher foreign exchange reserves, high commodity prices, political stability and better corporate earnings plus reasonable valuations compared with other emerging and developed markets have all helped propel these markets higher.

Both country's also have stronger balance sheets and some outstanding companies in their ETF baskets such as American Movil and Cemex (NYSE:CX) for Mexico. Chile is also known as the star of Latin America for its pro-market policies and the tiny Peru market is the best performing market in the world so far this year.

Michael Mackenzie of the FT reports that Mexico’s Bolsa index of 35 companies has risen 13.3% this year , while Chile’s Stock Market Select index of 40 companies has rallied 20.4%. Leading the pack is a 78% rise in Peru’s 34-member index.

ILF 1-yr chart:

Source: Latin American ETFs Hit Record Highs