LatinFinance - May/June 2016 - 14

It invests in around 50 American blue
chips such as Google, Apple, Microsoft and
Wal-Mart. As a result, in the past few years
the fund benefited from both the rally of
American stocks and the depreciation of
the real against the dollar, said Ricardo
Almeida, the head of equities at Bradesco
Asset Management, BRAM.
"Performance was boosted by the good
trajectory of American equities, but also
by the currency exchange," he points out.
Since the launching of the fund, in late 2011,
the value of the real has halved compared
to the US dollar.
The BDR-based fund was at first offered only to qualified investors, but since
the CVM, Brazil's securities commission,
changed the rules for investment in funds
last year, the company has also targeted
retail investors.
"We like to offer our clients the possibility of diversifying their portfolios," Almeida
says, noting that BRAM also offers equity
funds focused on Europe, Japan, Asia and
Latin America. "For the investor, it is an
intelligent way to mitigate the portfolio

risk. These funds offer an interesting currency exposure and the possibility to invest
in sectors that are not very developed in
the Brazilian stock exchange, such as technology."
The challenge for the fund is to carry
on delivering results even as the American
market looks less bullish and the real stops
devaluing, which is likely to happen if the
Brazilian economy reaches some kind of
normalcy.
"We are a little worried about the US
labor market," Almeida says. "Even though
revenues have not been outstanding, American companies have been able to increase
their margins thanks to technology and
innovation. Now the labor market is tight,
workers tend to demand higher wages, and
it could put pressure on margins."
But, by focusing on American stocks, the
fund has taken a road that has proved the
best choice for equity investors in Brazil of
late, says Fernando Lovisotto, a director at
Vinci Partners. "The funds that are the most
detached from Ibovespa have fared much
better."

That means avoiding securities that
constitute a large share of the index, such
as Petrobras and Vale, which have taken
a dramatic fall due to both Brazilian and
global trends. Another option is concentrating investments on a few, reliable stocks,
he says.
Concentration is one of the factors that
explain the positive performance of BTG
Pactual Absoluto FIC FIA, the sixth-best
performer in the three-year period in the
equities fund category. José Zitelmann, the
head of Equities at the BTG Pactual's asset
management unit, says the five largest holdings of the fund amount to over 50% of its
assets under management.
Another pillar of the fund's strategy is
that it only invests in companies that its
managers know thoroughly, he says. And it
also tends to look for quality stocks, even if
they are not among the cheapest securities
around.
"We look for winners, even if their valuation, although attractive, is higher than
some of their peers," Zitelmann says.
One example is Lojas Renner, a retailer

Finding value
LatinFinance 2016 Brazilian Equity Investor Scorecard
Name

Manager

Bram

Bradesco FIA Bdr Nivel I

Average net assets, Apr 15 - Mar 16 ($ ,000)

1-year return (%)

3-year return (%)

116,209

11.9

126.6
60.6

Atmos Capital

Atmos Acoes FIC de FIA

150,521

15.8

BTG Pactual

BTG Pactual Absoluto LS FIC FIA

140,186

14.6

54.1

Dynamo Internacional

Dynamo Global FIC FIA Ie

264,105

8.3

110.1

Spx

Spx Falcon FIC FIA

244,638

16.4

34.2

Average net assets, Apr 15 - Mar 16 ($ ,000)

1-year return (%)

3-year return (%)
39.6

Source: Economatica. Data to March 31, 2016

Being selective
LatinFinance 2016 Brazilian Debt Investor Scorecard
Name

Manager

Caixa

FI Brasil Idka IPCA 2a

555,060

16.4

Gerval

Fig FI RF Cred Priv

131,433

14.7

41.3

Western Asset

Prev Credit RF FI Credpriv

395,218

14.2

40.7

BB Dtvm

Prev RF Idka 2

1,239,713

16.3

39.3

HSBC

RF Cred Priv LP Perf Master 20

661,258

14.2

39.8

Average net assets, Apr 15 - Mar 16 ($ ,000)

1-year return (%)

3-year return (%)

Source: Economatica. Data to March 31, 2016

Strong returns
LatinFinance 2016 Brazilian Multimercado Investor Scorecard
Name

Manager

Spx

Raptor Feeder Ie FIC

381,780

20.5

68.1

Safra

S&P

220,474

14.0

143.1

Patria Investimentos

Credit Mas Fc

144,050

18.3

59.2

Verde

CSHG Verde FICFI

475,422

13.5

57.8

Itau Dtvm

Investcenter Verde FICFI

106,556

13.5

57.7

Source: Economatica. Data to March 31, 2016

14 L ATINFINA NCE.COM - May/June 2016
http://www.LATINFINANCE.COM
Table of Contents for the Digital Edition of LatinFinance - May/June 2016
