While India and China have been the big headline-makers over the past few years, stocks in many countries throughout Central and South America have also been salting away impressive gains.

Thanks in part to strong global demand for steel, Brazilian iron ore producer Companhia Vale Do Rio Doce (NYSE: RIO) has dug up gains of +465% over the past three years. Meanwhile, Petroleo Brasileiro (NYSE: PBR), which controls 95% of Brazil's oil production, has racked up a massive return of +550%.

And the gains haven't been limited to the commodity boom either. Mexican wireless provider America Movil (NYSE: AMX), Colombian financial giant BanColombia (NYSE: CIB) and many others have also enjoyed healthy triple-digit gains.

And all of these companies are well represented in the Latin American Discovery Fund's (NYSE: LDF, $26.65) $300 million portfolio. But that's not all you'll have access to.

While the firms above are all ADRs that can conveniently be picked up on the New York Stock Exchange, LDF also has a direct stake in companies like Colombian food retailer Almacenes Exito and Brazilian power producer Cia Energetica de Sao Paulo -- which only trade on foreign exchanges and would otherwise be difficult for U.S. investors to tap into.

Not surprisingly, given the rich natural resources of Latin America, LDF is heavily weighted in the metals/mining and oil/gas sectors, representing a combined weighting of 40%. However, shareholders will also have a stake in banking, telecom, software, media, consumer staples and other industries. Notably, the fund was also sitting on about $38 million (about 15% of the portfolio) in money market assets at year-end -- cash that can be quickly deployed to take advantage of falling prices.

Having the flexibility to hold cash during an uncertain market is just one of the benefits of this actively managed fund. Not only can its management team cherry-pick whatever stocks in the region they see fit, but they can also overweight, underweight or even avoid certain countries depending on market conditions.

Commentary from the latest annual report suggests the portfolio has little exposure to Chile, where stock valuations are becoming stretched and interest rates are on the rise. By contrast, management is making a bold bet on Brazil, arguably the region's most explosive country, and on Mexico -- which is benefiting from lowered inflation, fiscal reform, and the lowest consumer debt levels in all of Latin America.

Of course, having the flexibility to deviate from traditional benchmarks only helps when managers can consistently make the right calls. Fortunately, they have done exactly that for more than a decade. In fact, LDF has scored in the top 1% of all Latin American equity funds over the past one, three, five, and ten-year periods.

Since 2003 alone, the fund has turned in annualized gains of better than +53%, outpacing the MSCI EM Latin America Index by more than eight percentage points per year -- and turning a $10,000 investment into approximately $83,000.

The downside to all those winning trades is that the fund typically distributes hefty capital gains payments each December and isn't particularly tax efficient -- but even on an after-tax basis, shareholder have had reason to smile. Also on the plus side, LDF trades at an attractive discount of -7.5% to NAV.

All things considered, LDF is a great way to participate in the continued prosperity of Latin America, which could well see its sixth-straight year of double-digit gains in 2008, as measured by the MSCI EM Latin America Index. Companies throughout the region are seeing improved balance sheets, expanding profit margins and stronger cash flow generation.

While a pullback in commodity prices remains a risk, investors willing to withstand the volatility of an emerging-markets fund should continue to be rewarded here.