Navigating difficult markets
The BlackRock Latin American Investment Trust (L:BRLA) provides investors with managed exposure to equities in the region, with the main country weightings being Brazil and Mexico (c 87% together). Over the last year, concerns over weakening global growth and US monetary policy have affected Latin American currencies and equities. The manager is cautious on Brazil, but sees better near-term economic prospects for Mexico and Peru, where the portfolio holds overweight positions. With much of the bad news potentially built into market prices, sentiment could rapidly turn and in the meantime, holders of BRLA benefit from a 6.7% yield.
Investment strategy: Sifting for growth at right price
The manager uses a blend of top-down and bottom-up analysis to select a portfolio of 50-75 stocks, with a focus on achieving growth at a reasonable price. The management team, two of whom are based in Sao Paulo, undertake detailed fundamental analysis and meet companies in order to identify stocks that can provide superior long-term performance. The approach is benchmark-aware but not index-driven, with diversification by country, industry and market capitalisation size. Stocks are continually monitored and may be sold as a result of significant changes in fundamentals or valuation.
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