Citywire 1000: Brazil's best target commodities

Brazil equities

As part of our comprehensive analysis of Citywire’s 1000 top fund managers worldwide, we head to the world of Brazilian equities.

Citywire 1000 is a ranking of the best global fund managers, based on their positive total return and risk adjusted performance over the last three years to June 2012.

Most notable recent developments in the Latin American powerhouse has seen the Brazilian central bank systematically cut its interest rates but slow growth coupled with slowly rising inflation have started putting pressure on the government to reverse its decision.

But it’s not all bad news for Brazil especially with regards to its commodity exports. Being a resource rich country, commodities account for almost 70% of the total exports.

Our analysis revealed that the outperformers have strong focus on financials, commodities and energy.Only 11 Brazilian equity managers were eligible for Citywire 1000 and just four of these managers have made the cut. Here we showcase two of the standout performers.

Lionel Bernard , Amundi

Amundi’s Lionel Bernard is the best performing Brazilian equity manager and is positioned 228^th in the Citywire 1000 overall ranking. He manages the Amundi Brazil equity fund and has returned 25% over this period outperforming its benchmark index MSCI Brazil which returned 15%.

With a portfolio of $148.43 million, Bernard looks to capture the growth potential of the country’s natural resources and internal demand over medium term. To achieve this he seeks to identify the best stocks at both the sector allocation as well as stock picking level.

The fund’s portfolio is made up of some of the most reliable and known names in Latin America, such as Companhia Brasileira de Distribuicao (biggest retail company in Brazil), Petroleo Brasileiro (the largest multinational energy company in Latin America) and Companhia de Bebidas das Americas (the biggest brewery in Latin America) among others.

Financials at 24.7% is the fund’s biggest sector and 16% is invested in big financial services companies such as Banco Bradesco, Itau Unibanco Holding and BM&F Bovespa which are amongst the top ten holdings.

Sebastian Luparia, JPM

Sebastian Luparia, manager of the JPM Brazil Equity fund, is second in the Brazilian equity sector and earned himself 345^th position in the overall Citywire 1000.

The fund aims for long term growth potential and provides access to some of Latin America’s leading stocks. A flexible investment strategy and unconstrained portfolio construction has allowed managers’ to focus on their best ideas.

One-third of the fund’s assets are invested in financials at 34.8% with its two largest holdings in Banco Bradesco and Itau Unibanco at 9.2% and 8.8% respectively. The other sectors following suite are Industrials at 16.8% and Consumer Staples 12.5%.

Comfortably beating the MSCI Brazil index the fund returned 23.4% and had a lower drawdown and volatility than the benchmark.

This fund is co-managed by Luis Carrillo who is third amongst the Brazil managers and ranked 392^nd overall. Luis also manages the JPM Latin America Equity fund.

To find out more about Citywire 1000 and to order a copy visit www.citywire1000.com

Performance analysis for the Brazilian equity sector has been calculated in Brazilian real over three years to 30 June 2012.