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LatAm equity managers who made money over the past three years

LatAm equity managers who made money over the past three years

Despite being seen as an area of emerging market growth, the Latin American equity sector has proven a hard hunting ground for investors over the past three years.

From the slowing growth of Brazil to geopolitical problems in markets such as Argentina and Venezuela, equity managers have faced several headwinds.

The market

In the Citywire database, there are 42 fund managers running a dedicated Latin American equity fund which has a track record of 36 months or greater.

Out of this pool of fund managers, the average manager has lost 19.55% in the three years to the end of October 2013. This is while the main benchmark, the MSCI EM Latin America TR USD, fell 15.17%.

Twenty-six of the fund managers in this sector have outperformed the average peer, while 17 managers have beaten the benchmark. However, only four of the fund managers have managed to make positive returns.

So, who has kept their performance in the black when the average manager and the index both struggled in the Latin American equity market?

Outperformers

3. Devan Kaloo, Aberdeen

Funds: Aberdeen Global - Latin American Equity I2 USD/Aberdeen Latin American Equity A Acc

Three year total returns (October 2010-October 2013): 0.97%

Citywire A-rated manager Devan Kaloo narrowly creeps into positive territory for his performance across two different Latin American equity funds.

In the Luxembourg-domiciled $1.7 billion Aberdeen Global – Latin American Equity fund, Kaloo has 68% of his geographic exposure in Brazil. Further down the list, he has Mexico (16%) and Chile (6.7%) as his next biggest allocations.

On a sector basis, Kaloo has a strong preference for financials (28.8%) and consumer staples (22%). This is reflected in his largest positions with Banco Bradesco and Banco Itaú among the top four positions, while materials giant Vale (8.9%) is the biggest stock holding.

2. Wojciech Stanislawski/Charles Biderman, Comgest

Fund: Comgest Growth Latin America Euro

Three year total returns (October 2010-October 2013): 1.31%

Narrowly pipping Kaloo to second place is Paris-based duo Wojciech Stanislawski and Charles Biderman of Comgest. The duo were joined by co-manager Juliette Alves at the start of 2013, who is omitted from this analysis due to her shorter tenure.

Stanislawski, who is Citywire + rated, and Citywire AAA-rated Biderman invest mainly in consumer staples, where they have a 6.7 percentage point overweight. This is while also having overweights in consumer cyclicals and industrials.

The largest positions in the portfolio, according to the latest factsheet, are a trio of Brazilian companies. These are beauty products manufacturer Natura Cosmetics (5.1%), meat-packing giant JBS (4.5%) and credit and debit card operator Cielo (4.2)%.

1. Jonathan Asante, First State

Fund: First State Latin America A GBP Acc

Three year total returns (October 2010-October 2013): 14.3%

Leading the field by some distance over the past three years is First State’s Jonathan Asante. The AAA-rated emerging markets expert has posted considerable outperformance on the UK-domiciled First State Latin America fund, which is registered for sale in six European markets.

Asante runs a relatively concentrated portfolio of 33 stocks, with consumer staples being a considerable sector overweight. Asante has 30.2% of the fund invested here compared to an 18.2% allocation by the benchmark.

Unlike most of his peers Asante’s largest country exposure is Chile. He has a significant overweight, holding 38 percentage points more than MSCI EM Latin America index. This is while running a 25 percentage point underweight to fund manager favourite Brazil.

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