Top Brazil Funds’ Contrarian Bet: Ignore Economy and Buy Stocks
This article is for subscribers only.
Brazil’s two biggest mutual funds have a message for longer-term investors that few in the recession-plagued country seem to want to hear: Now is a good time to buy stocks.
BB DTVM and Itau Asset Management, which combined oversee almost 1 trillion reais ($330 billion) in multi-asset investments, point to cheap prices in dollar terms, a weak local currency that’s fueling exports and prospects government spending cuts will stave off a credit-rating downgrade to junk. While the Ibovespa has been rallying recently, the increase is largely explained by foreign stock-buyers as locals sit on the sidelines.