by Ben Miller
Jul 1, 2011
Concerns over political and inflation risks have hit equity portfolios dedicated to the region. Investors are now on the hunt for value and diversification away from Brazil.
LatAm equity funds have had a bumpy ride of late as regional indices dramatically underperformed US stock markets during the first half. But portfolios remain in good shape year-on-year thanks to the post-crisis resurgence in 2010. Investors are now seeking buying opportunities and diversification away from Brazil, while also keeping their faith in the region’s consumer growth story.
Concerns over inflation, particularly in Brazil, and the return of political risk in Peru after the election victory of left-wing presidential candidate Ollanta Humala, have weighed on prices this year and subsequently dented dedicated LatAm portfolios.
For the year to June 1, the MSCI LatAm index was down 1.2%, reflecting the largely lackluster performance across the region in dollar terms. For instance, Brazil’s Ibovespa index fell 4% over the same period, making it one of the region’s worst performers with the exception of the 12.6% dip seen on Peru’s...
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