FLLA vs ILF

Key Takeaways

• FLLA tracks the FTSE Latin America RIC Capped Index across roughly 140 large- and mid-cap stocks, while ILF tracks the S&P Latin America 40 Index of just 40 of the region's largest equities, making ILF a more concentrated, mega-cap-heavy vehicle.
• Cost structure diverges sharply: FLLA charges a 0.19% expense ratio versus 0.47% for ILF, a meaningful structural advantage for long-term holders.
• Both funds are heavily weighted to Brazil, Mexico, financials, and materials, but ILF adds exposure to high-growth fintech and Peru-based names not prominent in FLLA's broader roster.
• Liquidity and scale strongly favor ILF, which holds several billion dollars in assets and trades with tighter bid/ask spreads than the comparatively small FLLA.
• Tickeron AI Verdict: ILF is favored based on superior liquidity, institutional scale, tighter trading spreads, and exposure to higher-momentum holdings, despite FLLA's lower cost and broader diversification.

Introduction

For investors seeking single-ticket access to Latin American equities, the Franklin FTSE Latin America ETF (FLLA) and the iShares Latin America 40 ETF (ILF) are two of the most recognizable options. Both are passive, index-tracking funds that provide regional exposure to Brazil, Mexico, Chile, and neighboring markets, and both lean heavily into the financials and materials sectors that dominate the region's listed equity universe. They do not track the same index, however, and they differ materially in holdings count, cost, liquidity, and concentration. This ETF comparison examines the structural differences, sector exposure, and relative positioning of these two funds to help investors decide which better matches their Latin America allocation goals.

Franklin FTSE Latin America ETF (FLLA) Overview

FLLA is a passively managed ETF that seeks to replicate the FTSE Latin America RIC Capped Index, a free-float-adjusted, market-capitalization-weighted benchmark of Latin American large- and mid-capitalization stocks. The index applies a quarterly capping methodology to limit single-issuer concentration. The fund launched in October 2018 and typically holds roughly 140 securities, giving it a meaningfully broader roster than its 40-stock peer.

Top holdings include Petróleo Brasileiro S.A. (Petrobras), Itaú Unibanco Holding, Vale, Grupo México, and Grupo Financiero Banorte. Sector allocation is led by financial services (around 26%), followed by materials, energy, industrials, and consumer staples. By country, Brazil represents roughly half of assets, with Mexico around 28% and Chile close to 8%. The fund carries a competitive 0.19% expense ratio and reconstitutes its index semi-annually, with semi-annual distributions.

iShares Latin America 40 ETF (ILF) Overview

ILF is a passive ETF that tracks the S&P Latin America 40 Index, which is composed of 40 of the largest and most liquid Latin American equities trading across five regional exchanges. Launched in October 2001, ILF is one of the longest-standing Latin America funds and is managed by BlackRock Fund Advisors. Although the index targets 40 names, the portfolio may hold slightly more securities when counting multiple share classes and cash.

Top positions include Nu Holdings, Vale, Itaú Unibanco Holding, Grupo México, and Petrobras. Financials are an even larger share of the fund at roughly 35%, followed by materials and energy. Country exposure is concentrated in Brazil (about 47%) and Mexico (about 23%), with additional positions in Chile, Peru, and Cayman Islands-domiciled Nu Holdings. The fund charges a 0.47% expense ratio and is classified as non-diversified, reflecting its concentrated, mega-cap orientation.

Industry and Thematic Backdrop

Both ETFs are shaped by the same macro forces driving Latin American markets. The region remains sensitive to global commodity prices, given the heavy weighting of energy producers, miners, and materials companies such as Petrobras, Vale, and Grupo México. Interest-rate cycles are equally important: financials dominate both portfolios, and regional banks such as Itaú Unibanco and Banorte are directly exposed to local monetary policy, credit growth, and currency volatility. Brazil's fiscal trajectory and Mexico's nearshoring-driven industrial investment have been recurring catalysts, while political and regulatory developments across the region introduce episodic risk. Elevated U.S. dollar strength and shifts in global risk appetite also influence fund performance, since local-currency returns are translated back into dollars for U.S. investors.

Performance and Positioning Comparison

In recent market cycles, both funds have moved broadly in tandem, reflecting their shared exposure to Brazilian equities, regional financials, and commodity-linked sectors. ILF's more concentrated, mega-cap profile has tended to amplify moves in its largest holdings, including high-growth fintech Nu Holdings, which has been a notable performance driver absent from FLLA's top tier in the same magnitude. FLLA's broader base of roughly 140 names and its capping rules have historically provided somewhat smoother, less single-stock-dependent exposure, while its 0.19% fee supports tighter tracking of its underlying index over time. On a relative positioning basis, ILF's far larger asset base and tighter average bid/ask spreads make it more efficient for frequent or larger trades, whereas FLLA's cost advantage may appeal to long-horizon, buy-and-hold investors comfortable with lower trading volume.

AI Screener

Tickeron's AI Screener is an AI-powered stock and ETF discovery tool that helps traders and investors filter the market based on technical patterns, fundamentals, trends, volatility, and AI-driven signals. Users can scan thousands of stocks and ETFs using customizable filters such as industry, market capitalization, technical indicators, price patterns, and performance metrics. The screener is designed to help identify trade ideas, trending stocks, breakout candidates, and emerging market opportunities more efficiently than manual screening. Explore the AI Screener to refine your own Latin America and emerging-markets watchlists.

Tickeron AI Verdict

Weighing structural strength, liquidity, cost efficiency, diversification, and trend consistency, Tickeron's AI would likely favor ILF in the current environment. Its substantially larger asset base, tighter bid/ask spreads, and deep institutional adoption support more reliable execution, while its concentrated exposure to high-momentum holdings such as Nu Holdings and Credicorp positions it to capture upside in regional growth names. That said, FLLA retains a clear structural edge on cost (0.19% versus 0.47%) and diversification breadth. The verdict is probabilistic rather than absolute: investors prioritizing low fees and broader holdings may prefer FLLA, while those seeking liquidity, scale, and mega-cap momentum exposure may find ILF the more compelling vehicle.

Disclaimer

The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.

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