Fund managers are trimming commodities exposures in favor of
consumer and other industries, a survey of leading managers has
As minerals prices trend down, top fund managers in LatinFinance’s 2013
equity investor scorecard say they are reevaluating
prospects for long-term returns. A strong correlation between
LatAm indices and commodities ones opens questions over the
logic of following the benchmark, they say, as managers turn
increasingly to consumer industries.
Schroders’ Latin America Equity investment fund
has been underweight on energy and materials, particularly
large caps with scope for government intervention, said manager
"Our focus has generally been on mid cap companies, where
you’ve got a more predictable demand picture," he
said. "Commodities have been pretty unpredictable." The fund
ranks sixth in the equity investor ranking.
Brazilian asset managers are taking a similar strategy.
Brasil Capital, which has the best performing equity fund in LatinFinance’s Brazilian
investor scorecard, has built up positions in companies it
likes. That includes consumer firms in education and consumer
"We are still very bullish on the consumer sector," said
Bruno Baptistella, portfolio manager at Brasil Capital.
Some debt fund managers are also keen to participate in
LatAm’s consumer boom. There is real value in the
briskly growing financial intermediation story across LatAm,
said Blaise Antin, head of sovereign research at TCW, whose
Emerging Markets Income Fund ranks fourth in LatinFinance’s debt
"Credit penetration is still quite low in much of Latin
America. We think it’s on a positive upward
trajectory, and we want to be part of that story," Antin said.
"The deleveraging we’ve seen in Europe and the US
is not something that we see in Latin America. Latin American
banks came out of the Lehman crisis in reasonably good health
with most LatAm banks traditionally employing a very plain
vanilla business model."
See the rankings and read more comments from the top
Debt investor scorecard: Beating the
Equity investor scorecard: Bargain
Brazilian investor scorecard: Sitting