Latin Finance - July/August 2010 - 13

equity/debt fund performance

Kutas is also finding a better riskreward profile in places like Mexico, Chile, and to a lesser degree Colombia, than in Brazil, where most of his targets have met the fund’s price expectations. In the long term, BlackRock’s Landers says Brazil is the best LatAm story, even if it is not going to outperform short-term. “The Brazilian market is trading at less than 11 times 2010 earnings with pretty good earnings growth of over 40% [for 2010], and it’s coming from all kind of sectors whether cyclical or secular domestic stories,” Landers says late-May.

Too Expensive?

On the debt side, investors played the corporate rally as many of the region’s high-quality sovereigns tightened, in some cases making them expensive for EM dedicated investors. Brazil, for example, saw soft demand for a 2021 bond in April that, while achieving a record low 4.875% coupon, only raised $750 million – low by Brazilian standards.

Experience matters, says Carlson “Brazil’s always going to be a part of the portfolio, but how big a part is always going to be reflected in the spreads, which are pretty tight,” says Jim Carlen, manager of the $119 million RiverSource

Emerging Markets Bond Fund. He adds that the same could be said for Mexico and Colombia. Carlen notes that Brazil’s 2019 benchmark traded at a spread of around 150 basis points to US Treasuries in early June, versus around 400 basis points at the beginning of 2009. Mexico’s 2019 has made a similar move in that time period, tightening from 370 basis points to 140. Colombia has seen its 2019 get to mid-180s after being above 500 basis points at the start of 2009. “Dedicated EM investors are perhaps at the margin going to be less interested in it, but a US dollar global [investor] and other investors wanting diversification might still view it as attractive,” Carlen says, referring to sovereigns like Brazil. For dedicated accounts, there are other ways to express a positive view, such as agency debt or blue-chip corporates, he explains. Several of the region’s sovereign and investment-grade credits have seen demand from US high-grade and other

UBS enters agreement to acquire Link Investimentos1 An ongoing commitment to Brazil, made even stronger
For more information, please contact Raul Esquivel at Raul-Esquivel@ubs.com

1

Acquisition subject to Central Bank of Brazil approval. © UBS 2010. All rights reserved.

July/August 2010

LatinFinance 13



Latin Finance - July/August 2010

Table of Contents for the Digital Edition of Latin Finance - July/August 2010

Latin Finance - July/August 2010
Contents
Equity/Debt Fund Performance
European Investors
Brazil Domestic Buyside
Mexican Domestic Buyside
Mexico Venture Capital
CEMEX CFO Interview
Panama Investment
Canadian Miners
Peru Investor Report
Peru is Making Strides to Develop Gas and Oil
Microfinance Volume Rises at a Steady Clip
Latin Finance - July/August 2010 - Latin Finance - July/August 2010
Latin Finance - July/August 2010 - Cover2
Latin Finance - July/August 2010 - Contents
Latin Finance - July/August 2010 - 2
Latin Finance - July/August 2010 - 3
Latin Finance - July/August 2010 - 4
Latin Finance - July/August 2010 - 5
Latin Finance - July/August 2010 - 6
Latin Finance - July/August 2010 - 7
Latin Finance - July/August 2010 - 8
Latin Finance - July/August 2010 - 9
Latin Finance - July/August 2010 - Equity/Debt Fund Performance
Latin Finance - July/August 2010 - 11
Latin Finance - July/August 2010 - 12
Latin Finance - July/August 2010 - 13
Latin Finance - July/August 2010 - 14
Latin Finance - July/August 2010 - 15
Latin Finance - July/August 2010 - 16
Latin Finance - July/August 2010 - European Investors
Latin Finance - July/August 2010 - 18
Latin Finance - July/August 2010 - Brazil Domestic Buyside
Latin Finance - July/August 2010 - 20
Latin Finance - July/August 2010 - 21
Latin Finance - July/August 2010 - 22
Latin Finance - July/August 2010 - 23
Latin Finance - July/August 2010 - 24
Latin Finance - July/August 2010 - 25
Latin Finance - July/August 2010 - Mexican Domestic Buyside
Latin Finance - July/August 2010 - 27
Latin Finance - July/August 2010 - 28
Latin Finance - July/August 2010 - Mexico Venture Capital
Latin Finance - July/August 2010 - 30
Latin Finance - July/August 2010 - CEMEX CFO Interview
Latin Finance - July/August 2010 - 32
Latin Finance - July/August 2010 - 33
Latin Finance - July/August 2010 - Panama Investment
Latin Finance - July/August 2010 - 35
Latin Finance - July/August 2010 - 36
Latin Finance - July/August 2010 - 37
Latin Finance - July/August 2010 - 38
Latin Finance - July/August 2010 - Canadian Miners
Latin Finance - July/August 2010 - 40
Latin Finance - July/August 2010 - 41
Latin Finance - July/August 2010 - Peru Investor Report
Latin Finance - July/August 2010 - 43
Latin Finance - July/August 2010 - 44
Latin Finance - July/August 2010 - Peru is Making Strides to Develop Gas and Oil
Latin Finance - July/August 2010 - Microfinance Volume Rises at a Steady Clip
Latin Finance - July/August 2010 - 47
Latin Finance - July/August 2010 - 48
Latin Finance - July/August 2010 - Cover3
Latin Finance - July/August 2010 - Cover4
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