As growth continues to stall in the developed world, investors have looked toward emerging markets to fill the niche, and funds like the Schwab Emerging Markets Equity ETF (ARCA:SCHE) have surged in popularity. With its vast reserves of natural resources, rising middle class and positive demographics, Latin America is often cited as a shining example of what emerging market investing is all about. However, Argentina's recent decision to expropriate YPF (NYSE:YPF), its largest oil company, has sent shock waves throughout investors' portfolios on continent.

Nationalization fears are certainly a major cause for concern and investors may want to stay away from an Argentinean investment. Luckily, there are plenty of other Latin American nations who are welcoming foreign direct investment in spades.

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Don't Cry For Argentina
Argentinean President Cristina Kirchner's recent proposal states that the oil industry is one of "national public interest" and would take control over 51% of YPF. Majority owner, Spain's Repsol YPF SA (OTCBB:REPYF) would see its ownership dwindle to just 6% and the plan would divide its assets among the federal and provincial governments. Overall, Argentinean government accused the oil firm of not investing enough back into its local fields and for not producing enough oil. Oil imports into Argentina rose around 110% last year.

There is no doubt that the populist government's latest action has massive implications for portfolios and the overall foreign direct investment climate in the nation. It will be interesting to see what happens to other foreign oil companies', such as Apache (NYSE:APA) and EOG Resources (NYSE:EOG), assets within the Neuquén basin.

However, while Argentina begins to unwind a decade of progress, there are plenty of Latin American nations that have recognized the importance of foreign capital. For example, Columbia recently signed a landmark free-trade agreement with the United States and saw FDI jump by 30.2% in the first quarter. Likewise, investment in nations like Chile, Brazil and Peru continue to rise, as international investors take comfort in their stable political situations.

SEE: Equity Valuation in Emerging Markets

Bet On the Winners
Overall, the IMF predicts economic growth for Latin America to remain brisk, with GDP growth expected to clock in at 3.7% throughout the rest of year. While the Global X FTSE Argentina 20 ETF (ARCA:ARGT) may be a dud, the rest of Latin America is ripe for the picking. Here's how to play the winners.

Featuring trading partners, including the United States and China, Peru has seen its economy surge on the back of metals exports. Since 2002, the Andean nation has experienced annual GDP growth of around 6.4%. Infrastructure investment remains brisk and business sentiment climbed to a one-year high back in February. The iShares MSCI All Peru ETF (ARCA:EPU) can be used as an inroad into the nation. The fund tracks 28 different Peruvian firms, including gold miner Compania de Minas Buenaventura (NYSE:BVN), and has surged since inspection based on its heavy weighting to material stocks (53%). Overall, the fund makes great play on the nation's continued bullish economic outlook.

Aside from the recent trade deal, there are plenty of reasons to be bullish on Colombia. With production rising rapidly at state oil company Ecopetrol SA (NYSE:EC), the nation has become a huge oil exporter. Political stability has helped it shed its former "Banana Republic" image and GDP growth continues to surge on the back of rising domestic consumption. The Global X FTSE Colombia 20 ETF (ARCA:GXG) is really the only game in town, when it comes to directly investing the nation. The fund tracks 21 different Colombian firms and charges 0.78% in expenses. The other choice in the region, the Market Vectors Colombia ETF (ARCA:COLX), barely has any liquidity and has less than $2 million in assets.

Finally, as the B in BRIC, Brazil's dominance on the world's stage is almost assured. As the largest economy in Latin America, the nation deserves a top spot in almost any portfolio. Both the iShares MSCI Brazil Index (ARCA:EWZ) and Market Vectors Brazil Small-Cap ETF (ARCA:BRF) remain the top ways to play the superstar.

SEE: Brazil Builds Up For the World Cup

The Bottom Line
Argentina's recent decision to nationalize its oil interests is certainly a troubling precedent for nation. The country's populist policies make it no investment destination. However, there are plenty of other opportunities in Latin America that understand how to operate in global economy. The trio of Colombia, Peru and Brazil make ideal choices to continue playing LatAm's natural resource driven growth story.

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At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.