Brazil is top country among EM's best managers

By on

Citywire analysis has revealed that Brazil is now the top country pick of a growing number of the top performing managers in emerging markets, while China is lagging behind.

For half of the top ten best performing managers in emerging markets over the last five years, Brazil represents either their top country exposure or a bigger weighting than China in their portfolios.

Among them are Euro Stars AA-rated manager Devan Kaloo of Aberdeen Asset Management and Eurostars A-rated Patrice Lemonnier of French giant Amundi.

Kaloo is second in the sector’s five year rankings and runs the Aberdeen Emerging Markets fund. The Latin American giant is the London manager’s top country exposure (17.6%) and three of his top ten holdings are Brazilian companies while only two are Chinese.

French star manager Lemonnier is ranked fifth over five years and has an even stronger preference to Brazil in his Amundi Actions Emergents fund. Over a fifth of his fund (20.98%) is focused on the country while China lies in second place with just over 15%.

The top performing EM manager over the last five years, Kristoffer Stensrud, has almost three times more exposure to Brazilian companies (9.9%) in his Skagen Kon Tiki fund than he does Hong Kong registered firms (3.8%).

While veteran emerging market manager Vincent Strauss, who runs the Comgest Growth Emerging Markets fund, has South Africa as the top country allocation (15.6%), Brazil lies in third position while China is in sixth place behind the US.

The ninth placed fund, Anima’s Emerging Markets fund run by Paolo Cirasole, also has a slight preference to Brazil over Hong Kong.

Last week, Brazil's finance minister, Guido Mantega (pictured), speaking at an IMF conference, criticised the IMF's proposal to restrict emerging countries from using control systems to limit capital flows in their countries, especially inflows of foreign capital and it is yet unclear what effect this could have for international investors.

‘We oppose any guidelines, frameworks or “codes of conduct” that attempt to constrain, directly or indirectly, policy responses of countries facing surges in volatile capital inflows,’ said Mantega.

‘Ironically, some of the countries that are responsible for the deepest crisis since the Great Depression, and have yet to solve their own problems, are eager to prescribe codes of conduct to the rest of the world, including to countries that are overburdened by the spillover effects of the policies adopted by them,’ added Mantega.

‘Governments must have flexibility and discretion to adopt policies that they consider appropriate, including macroeconomic, prudential measures and capital controls.’

*All figures and statistics have been taken from the group's own factsheets.