It’s not easy being invested in equities these days. Especially higher beta region like Latin America.
The market is not really rewarding the region for its solid government finances and ever-expanding consumer base.
This isn’t the 1980s. These aren’t banana republics anymore. Sure, they have their problems, and each country is different.But they’re government’s aren’t broke either.
And policy makers there have plenty of fire power to stimulate the economy to keep them out of a recession. It’s not a boom market anymore. For that, investors will need to bottom fish, or go to frontier states within the region.
Think countries like Paraguay, for example, a place most investors couldn’t find on a map. Or Argentina, which remains an investor pariah state in the region after defaulting nearly a decade ago.
But if slow and steady growth is of any interest, and if 5% yield on corporate bonds sounds appealing, then Latin America is probably the only place you’re going to get it.
Heiner Skaliks runs the Strategic Latin America Fund (SLATX) out of their office in La Paz. It’s a different kind of mutual fund.
It’s got two benchmarks, with the main one being the MSCI Latin America Investable Market Index, or IMI. It can move in and out of equities and bonds, including corporate debt.
It’s not wedded to low yielding sovereign bonds (Brazil’s Global 2020 bonds pay around 3.3% annually), and it minimizes currency risks by buying dollar denominated debt.
“We’re taking a top down, tactical approach to investing in Latin America so if Brazil equities look unattractive, and they have for us for months now, then we rotate out of that and into corporate bonds, or out of Brazil altogether.
We have the flexibility, almost like a hedge fund,” Skaliks said. Their mandate is to make money. In the first quarter, the fund returned 16.01% compared with the 15.14% gains of the MSCI Latin America IMI Index. Over the course of a year, the fund’s up 2.13% versus -8.37% for the same index.
Since the fund launched on May 3, 2010, it is up 5.32% versus 3.39% to the benchmark, according to Morningstar.
The fund loses ground against the benchmark in this case when sales fees are included; up just 2.51%.Outside of Brazil, Mexico and maybe the political dramas of Hugo Chavez in Venezuela, Latin America has fallen off America’s radar for much of the last 10 years.
forbes.com
This isn’t the 1980s. These aren’t banana republics anymore. Sure, they have their problems, and each country is different.But they’re government’s aren’t broke either.
And policy makers there have plenty of fire power to stimulate the economy to keep them out of a recession. It’s not a boom market anymore. For that, investors will need to bottom fish, or go to frontier states within the region.
Think countries like Paraguay, for example, a place most investors couldn’t find on a map. Or Argentina, which remains an investor pariah state in the region after defaulting nearly a decade ago.
But if slow and steady growth is of any interest, and if 5% yield on corporate bonds sounds appealing, then Latin America is probably the only place you’re going to get it.
Heiner Skaliks runs the Strategic Latin America Fund (SLATX) out of their office in La Paz. It’s a different kind of mutual fund.
It’s got two benchmarks, with the main one being the MSCI Latin America Investable Market Index, or IMI. It can move in and out of equities and bonds, including corporate debt.
It’s not wedded to low yielding sovereign bonds (Brazil’s Global 2020 bonds pay around 3.3% annually), and it minimizes currency risks by buying dollar denominated debt.
“We’re taking a top down, tactical approach to investing in Latin America so if Brazil equities look unattractive, and they have for us for months now, then we rotate out of that and into corporate bonds, or out of Brazil altogether.
We have the flexibility, almost like a hedge fund,” Skaliks said. Their mandate is to make money. In the first quarter, the fund returned 16.01% compared with the 15.14% gains of the MSCI Latin America IMI Index. Over the course of a year, the fund’s up 2.13% versus -8.37% for the same index.
Since the fund launched on May 3, 2010, it is up 5.32% versus 3.39% to the benchmark, according to Morningstar.
The fund loses ground against the benchmark in this case when sales fees are included; up just 2.51%.Outside of Brazil, Mexico and maybe the political dramas of Hugo Chavez in Venezuela, Latin America has fallen off America’s radar for much of the last 10 years.
forbes.com
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