Blackrock (NYSE:BLK) Latin American Inv Trust (LON:BRLA) is a well-established fund offering exposure to Latin America via a diversified equity portfolio. Manager William Landers aims to generate an attractive total return from a portfolio of 50-75 holdings invested across the capitalisation spectrum. He notes that despite negative political headlines in Brazil (the largest economy in the region), there is economic progress helped by falling interest rates and an inflation rate that is lower than the Central Bank of Brazil’s target. Landers is positive on Brazil’s political agenda and believes that the recent passing of the labour reform bill suggests that there is a broad appetite for reform, less conditional on President Temer than may have been thought. The manager is positive on the outlook for Latin American equities, while acknowledging that there will be “bumps along the way”. BRLA’s current dividend yield is 2.7%.
Investment strategy: Bottom-up and top-down
Landers combines bottom-up fundamental research with an assessment of the macro environment to construct a portfolio that is diversified by geography and sector. He is able to draw on the deep resources of BlackRock’s Latin American and wider investment teams, seeking financially strong companies with favourable growth prospects that are trading on attractive valuations. An assessment of the management of potential investee companies is an important part of the investment process. Gearing of up to 25% of net assets is permitted; at end-June 2017 net gearing was 4.8%.
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