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Carmignac’s Xavier Hovasse: How upcoming elections could shape emerging markets

by Elsa Buchanan on Apr 02, 2014 at 07:00

While the currency situation will depend on the election, Hovasse explains Modi’s victory ‘could be very good’ for foreign direct investments’.

He also has a large overweight in the Philippines versus the benchmark, where he sees ‘good growth prospects’.

‘This is a country that has support from remittances of workers abroad who usually work in hard currency countries. The money sent back home means prospects for payment balance is good. This also means prospects for currency are good.’

However, he is negative on Brazil, and says a defeat by incumbent president Dilma Rousseff is ‘the only way out’. ‘Brazil could be rerated if she lost, and business confidence could shoot up,’ he added.

Over the last 12 months, the fund has posted a 9.27% loss versus a 12.6% fall by the MSCI Emerging Market Small and Mid-cap benchmark. Over three years, it was down 5.53%, compared to the benchmark’s 5.75% fall, according to Lipper.

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