Investment funds: LatAm mutual funds are world’s best performers
Latin American mutual funds are the best performers in the world year-to-date according to fund tracker Morningstar,which reports rises of 32.26% for the first half of 2007.
"It is always tough to try to forecast 40% to 50% annual returns, but I would say that given that investors are seeking earnings growth of about 25% this year, then a 25% annual return next year is not out of whack" Will Landers, BlackRock Investments
Their three-year annual returns stand at an impressive 60.06%. In comparison, Pacific/Asia ex-Japan funds that tap into the booming economies of India and China were up 30.58% for the year, with a three-year average of 38.42%. The strongly performing stocks in Latin America come from all sectors, with big players such as Brazilian minerals and energy companies CVRD and Petrobras, and Mexican telecom company América Móvil in particular providing healthy returns. The whole region’s domestic growth is also driving consumer-related sectors such as retail, construction and financial services. However, the engine of the region is Brazil, with more than 50 IPOs expected in the next 12 months, low valuations and a fast-growing middle class helping to push fund returns.
Many fund managers remain highly optimistic about Latin America: "I expect a continuation of the story we have seen here over the past few years," says Will Landers, who manages $6.5