Although events in Asia have been capturing investor attention in the world of emerging economies, Latin America has been quietly making its mark.

A pall has hovered over Latin America in recent years due to economic troubles in countries such as Brazil, Argentina and Venezuela. Although the region is not out of the woods yet, some money managers are upping their exposure, believing the worst is over and stock prices have strong upside potential as business recovery takes hold.

Gerardo Zamorano, director of investments at San Diego-based Brandes Investment Partners LP, views Brazil, the largest economy in Latin America, as a turnaround situation. Although he does not make top-down allocation decisions, an abundance of attractively priced opportunities has drawn him to Brazil, which accounts for about 55% of Latin America’s total market capitalization.

At the beginning of 2016, Zamorano raised Brazil’s weighting in Brandes Emerging Markets Value Fund to 20%, three times the 6.7% weighting in the benchmark MSCI emerging markets index. The largest holding in his fund is Brazil food and general merchandise retailer Companhia Brasileira de Distribuição’s preferred shares.

“Brazil has suffered corporate corruption, political scandals followed by impeachment proceedings and a drop in [gross domestic product (GDP)] of 4% last year — its worst recession in decades,” Zamorano says. “There’s also been growing unemployment, rampant inflation, credit downgrades and the Zika virus. In our view, the market threw in the towel, and it didn’t seem right for businesses to be priced as negatively as they were.”

Zamorano has found compelling value in several sectors in Brazil, including banks, utilities, telecommunications, education, industrial and food. Although Brazil is by far his largest holding in Latin America, he also holds companies in Chile, Columbia and Mexico, and is overweight in each of these countries relative to the MSCI emerging markets index.

In Mexico, he has found value in a couple of high-yielding real estate investment trusts and Cemex SAB, a multinational cement and building materials company. He has also picked up a couple of companies in Panama, which he describes as a “frontier market” that doesn’t yet qualify for inclusion in the MSCI emerging markets index.

“It was justifiable to add companies based in Panama,” he says. “We own a bank and an airline,”

Mark Mobius, executive chairman of Templeton Emerging Markets Group, a division of U.S.-based Franklin Templeton Investments, in Singapore, is also spotting value in Brazil and says that outside of China, India and Thailand, the Latin American country offers the best opportunity.

The suspension of President Dilma Rousseff in May and the installment of interim President Michel Temer helped reignite confidence, Mobius says. Rousseff was impeached in August due to her role in a massive corruption scandal and manipulation of the federal budget to mask a deficit, and Temer was sworn in as president.

“The Brazilian market is down, the currency is down, and it’s a huge and diverse market,” Mobius says. “We like to buy in places where there are bargains, and Latin America falls into that category.”

Mobius expects Mexico to benefit from increasing trade due to its proximity to the giant market of consumers in the U.S. In addition, its domestic economy is strong and GDP is growing at about 2.5% annually. Mexico, as well as Argentina, Chile and Peru are benefitting from financial and structural reforms to improve business efficiency and competiveness.

Still, the best performance this year has been in Brazil, in which an impressive turnaround in stock prices in recent months had its index up by 54% year-to-date as of Aug. 31 in Canadian dollar (C$) terms. In addition, the Brazilian real has been one of the best performing currencies.

Peru has also been a strong performer year-to-date, with its index up by 46% year-to-date as of Aug. 31 in C$ terms. Overall, the region as measured by the MSCI emerging markets Latin America index has gained 27% during the same period.

Christine Tan, senior portfolio manager and chief investment officer with Excel Investment Counsel Inc. of Mississauga, Ont., says Latin America has been “off the radar” for the past few years, but at this point she too likes Brazil from a risk/return standpoint.

Specifically, Temer has implemented sensible fiscal policies and growth is expected to turn positive in 2017. Inflation has fallen back from its peak, which gives the central bank leeway to cut interest rates from levels of about 14%.

“Brazil has been a star performer among emerging economies this year, and it still has room to go,” Tan says. “It is still not expensive, and there is potential for further improvements in earnings.”

This is the third article in a three-part series on emerging markets.