Large-Cap Fund's Multi-Million Dollar Exit From MercadoLibre Valued at $13.18M Signals Strategic Reassessment

A significant portfolio shift has emerged from recent SEC filings. On February 4, 2026, Aubrey Capital Management Ltd—a London-based investment firm—announced its complete exit from MercadoLibre, liquidating a position that was valued at approximately $13.18 million. The fund divested 5,638 shares during the fourth quarter of 2025, marking the end of a holding that once represented 4.15% of its managed assets.

Transaction Valued at $13.18 Million Reflects Meaningful Portfolio Restructuring

The stake elimination represents more than a routine rebalancing. According to the 13F filing dated February 4, 2026, the transaction—valued using quarterly average pricing through December 31, 2025—reduced the fund’s MercadoLibre exposure to zero. The position had generated material value for the fund but ultimately did not align with the investment firm’s revised portfolio strategy. This liquidation came as part of a broader contraction, with the fund’s reportable assets declining by 20% quarter-over-quarter to $254.07 million across 53 holdings.

Fund Reallocation Signals Confidence Elsewhere

With MercadoLibre removed from its holdings, Aubrey Capital adjusted its portfolio concentration. The fund’s largest positions as of the filing reveal a diversified approach: NASDAQ:FUTU commands $20.20 million (8.0% of AUM), NYSE:EMBJ holds $20.02 million (7.9% of AUM), NYSE:NU represents $18.81 million (7.4% of AUM), NYSE:LTM accounts for $18.51 million (7.3% of AUM), and NYSE:BABA comprises $15.58 million (6.1% of AUM). The shift suggests the fund identified more attractive risk-adjusted returns elsewhere in emerging markets.

MercadoLibre’s Profitability Under Pressure Despite Revenue Expansion

The exit timing raises questions about MercadoLibre’s fundamental trajectory. While the Latin American e-commerce platform has demonstrated impressive revenue growth—expanding from $22.4 billion to $26.2 billion over the trailing twelve months—profitability has faced headwinds. Operating margins have compressed from approximately 13% to below 10%, reflecting aggressive logistics network expansion and intensifying competitive pressures. The company is making substantial investments in supply chain infrastructure to enhance its competitive moat, but near-term margin expansion appears unlikely.

Stock Performance Remains Volatile Amid Growth Story

As of February 3, 2026, MercadoLibre shares were trading at $2,099.90, reflecting a complex valuation narrative. The stock has appreciated 77% since 2023, translating to a compound annual growth rate of 20.9%—slightly outpacing the S&P 500’s 20.4% CAGR. However, recent momentum has stalled. Shares have retreated 11% over the past six months as investors grapple with the profitability-versus-growth trade-off. Over the past year, the stock has gained 10%, yet it has underperformed the broader market by 5.4 percentage points, suggesting sector-specific challenges or valuation reversion.

The Bull Case: Logistics Investments May Yet Deliver Returns

Despite near-term margin compression, a credible bull thesis persists. MercadoLibre’s logistics expansion remains foundational to its long-term competitive positioning across Latin America. The company’s integrated ecosystem—combining e-commerce marketplace functionality, Mercado Pago digital payments, credit offerings, and advertising services—creates natural cross-selling opportunities. Revenue growth of 18% year-over-year, coupled with expanding user engagement metrics, indicates sustained demand for the platform’s services. Should logistics investments deliver operational leverage, the company could see material margin recovery within 12-24 months.

Investment Decision: Opportunity or Warning Sign?

The significance of Aubrey Capital’s exit cannot be ignored. When a professional money manager voluntarily liquidates a position valued at over $13 million from a fund of $254 million—representing meaningful portfolio weight—it warrants investor attention. The decision likely reflects concerns about near-term profitability trajectory and capital allocation efficiency rather than a fundamental belief in the business’s long-term viability.

For growth-oriented investors, MercadoLibre’s recent correction presents a potential entry point, particularly for those comfortable with margin pressure and execution risk. The company’s market leadership in Latin American e-commerce, combined with its diversified revenue streams, provides downside protection. However, investors should acknowledge the near-term profitability headwinds and the possibility that margin recovery takes longer than anticipated.

The Motley Fool’s analyst team has identified alternative investment opportunities they believe offer superior risk-adjusted returns for the coming years. Their research emphasizes that disciplined stock selection, as evidenced by their historical performance with positions like Netflix (recommended December 2004) and Nvidia (recommended April 2005), can deliver exceptional wealth-building outcomes. Stock Advisor’s 906% average return—substantially exceeding the S&P 500’s 195% return—demonstrates the value of professional investment guidance.

Before committing capital to MercadoLibre or any emerging market exposure, consider your investment timeline, risk tolerance, and return expectations. The fund’s deliberate exit suggests professional caution is warranted.