LatinFinance - May/June 2015 - 12

COVER
STORY
The year just past was one in which normal investment strategies did
not apply. 2015 has yet to prove much better. Investors are focusing
more carefully than ever on avoiding assets that could soon slide out
from under them. By Katie Llanos-Small

Treading
carefully
P

etrobras has come to be one stock that equity investors pride themselves on not
holding. For years, the Brazilian company's shares have trod a steady path lower, and last
year the stock fell off the proverbial cliff.
Many of the best long-term equity investors have steered clear, and for that they have,
typically, been rewarded with benchmark-beating returns.
Early 2015 was different. The oil and gas company's shares rallied sharply from mid-March
through presstime in May. Investors who had once happily avoided the stock now lament the
gaping hole in their portfolios.
Petrobras' slump and sudden rally has been emblematic of Latin American investing in the
past 12 months, say fund managers. The normal rules of engagement were tossed out.
"This was one of the years where our process doesn't necessarily work," says Luis Carrillo,
head of the Latin America Group in JPMorgan Asset Management's emerging market equities
team. "Brazil's market was driven by who was going to win the election. It was one of those
years where you had to be diversified, without taking enormous risks."

12 L ATINFINA NCE.COM - May/June 2015

For BlackRock, it was similar. "Typically
we do well in years where stock picking
is the most important thing," says Will
Landers, emerging markets fund manager.
"It hasn't necessarily been that type of year,
but we've been able to weather it okay."
Bond investors are similarly downbeat.
As the commodities cycle ground to an
abrupt halt, Mexico's much-awaited
moment never quite materialized. Andean
exchange rates plummeted, and fixedincome managers struggled to find the
value of years past. On top of everything
else, portfolio administrators have had


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LatinFinance - May/June 2015

Table of Contents for the Digital Edition of LatinFinance - May/June 2015

Contents
LatinFinance - May/June 2015 - Cover1
LatinFinance - May/June 2015 - Cover2
LatinFinance - May/June 2015 - Contents
LatinFinance - May/June 2015 - 2
LatinFinance - May/June 2015 - 3
LatinFinance - May/June 2015 - 4
LatinFinance - May/June 2015 - 5
LatinFinance - May/June 2015 - 6
LatinFinance - May/June 2015 - 7
LatinFinance - May/June 2015 - 8
LatinFinance - May/June 2015 - 9
LatinFinance - May/June 2015 - 10
LatinFinance - May/June 2015 - 11
LatinFinance - May/June 2015 - 12
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LatinFinance - May/June 2015 - 14
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LatinFinance - May/June 2015 - 16
LatinFinance - May/June 2015 - 17
LatinFinance - May/June 2015 - 18
LatinFinance - May/June 2015 - 19
LatinFinance - May/June 2015 - 20
LatinFinance - May/June 2015 - 21
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LatinFinance - May/June 2015 - 48
LatinFinance - May/June 2015 - Cover3
LatinFinance - May/June 2015 - Cover4
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