Views from the Ground: Brazil

Views from the Ground: Brazil

Brazil stands out from the rest of the world in the form of valuations, positive real interest rates, an advanced interest rate cycle, a positive consumer reopening environment, and near-term catalysts. However, there is still a significant amount of uncertainty in the form of politics, inflation, commodity prices, and inequality. The lack of certainty creates interesting opportunities for stock pickers and we are optimistic about the prospects for our current holdings.

Click on the fund name for a list of the top ten holdings for the Emerging Markets Great Consumer Fund and/or the Emerging Markets Fund as of the most recent month. Holdings are subject to change at any time.

The views and information discussed are subject to change and may not reflect the current views of the writer(s). The views expressed represent an assessment of market conditions at a specific point in time, are opinions and may not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell securities or investment vehicles

Definitions 

Bovespa Index, best known as Ibovespa, is the main performance indicator of the stocks traded in B3 and lists major companies in the Brazilian capital market. Carry trade is a method of investing in which an investor borrows money at a low interest rate to buy an investment that is likely to produce a much higher amount of profit. Drawdown is an investment term that refers to the decline in value of a single investment or an investment portfolio from a relative peak. Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period. Market Capitalization is the value of a company that is traded on the stock market, calculated by multiplying the total number of shares by the present share price. MSCI Brazil Index is designed to measure the performance of the large and mid cap segments of the Brazilian market. You cannot invest directly into an index. MSCI Brazil Value Index captures large and mid-cap representation across Brazilian markets exhibiting overall value style characteristics. You cannot invest directly into an index. MSCI Brazil Growth Index captures large and mid-cap representation across Brazilian markets exhibiting overall growth style characteristics. You cannot invest directly into an index. MSCI Brazil Financials Index captures large and mid-cap representation across Brazilian securities. All securities in the Index are classified in the Financials sector.  You cannot invest directly into an index. MSCI Brazil Energy Index captures large and mid-cap representation across Brazilian securities. All securities in the Index are classified in the Energy sector.  You cannot invest directly into an index. MSCI Brazil Consumer Discretionary Index captures large and mid-cap representation across Brazilian securities. All securities in the Index are classified in the Consumer Discretionary sector.  You cannot invest directly into an index. MSCI Brazil Consumer Staples Index captures large and mid-cap representation across Brazilian securities. All securities in the Index are classified in the Consumer Staples sector.  You cannot invest directly into an index. Price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its earnings per share. Real interest rate is one that has been adjusted for inflation, reflecting the real cost of funds to the borrower and the real yield to the lender. Selic interest rate is the monetary policy interest rate, i.e, the key tool used by Brazil’s central bank in the implementation of the monetary policy. Standard Deviation is a statistical measure of volatility and is often used as an indicator of the 'risk' associated with a return series. 

Investment Considerations — There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including the potential of loss of principal.

Emerging Markets Risk — The risks of foreign investments are typically greater in less developed countries, which are sometimes referred to as emerging markets. For example, political, legal and economic structures in these country may be changing rapidly, which can cause instability and greater risk of loss. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluation, which could hurt their economies and securities markets. For these and other reasons, investments in emerging markets are often considered speculative. Similarly, investors are also subject to foreign securities risks including, but not limited to, the fact that foreign investments may be subject to different and in some circumstances less stringent regulatory and disclosure standards than U.S. investments.