The landscape of Latin America is changing at a rapid pace, with the most recent development seeing President Dilma Rousseff ousted by Brazil’s senate.
Over two-thirds of the country's 61 senators backed her removal from office, which confirmed interim president Michel Temer as the country's leader.
Elsewhere, in the region, Mexico’s economy has shrunk for the first time in three years in the second quarter. While only contracting 0.2%, the drop came as a shock for a country many had pegged as a success in the LatAm region.
While prospects for growth are variable in LatAm, Citywire Selector has shone a light on the region's equities sector to find the top three performing managers in the ever volatile market over the past three years.
There are currently 60 managers operating dedciated quity Latin America equity funds with a three-year track record to the end of July 2016.
The average of these managers lost 21.17%, while the MSCI EM Latin America TR USD, the most commonly held benchmark, fell 17.01% in US dollar terms over the same period.
Despite negative returns, there are three managers who have managed to keep their losses under the 10% mark.
Three-year total return (July 2013–July 2016): -5.69%
Citywire A-rated Jose Zitelmann sits in third place for his performance in the sector over the analysis period, for the performance on the BTG Pactual SICAV-Latin American Equity fund.
Zitelmann has run the Luxembourg-domiciled fund since its inception in September 2012. Zitelmann currently focuses the fund’s assets on the consumer sector, with a 36.15% allocation here. This is closely followed by financials at 25.43% and financial services at 9.76%.
In terms of country allocations, Zitelmann holds 55.66% in Brazil, 28.79% in Mexico, 8.90% in Chile, 3.20% in Columbia and 2.99% in Peru.
2. Luiz Ribeiro
Three-year total return (July 2013–July 2016): -4.82%
Citywire + rated Luiz Ribeiro has scooped second place by being heavily invested in financials and Brazil.
As of the end of July 2016, Ribeiro has 38% of the fund allocated to financials and 57.4% allocated to Brazil. In his most recent fund commentary, Ribeiro said the fund benefitted from its overweight in financials (38%) and discretionary (33%), which more than offset the fund's current underweight in materials and energy.
In terms of country allocation, Ribeiro's tops positions are in the aforementioned Brazil, while he has 13.5% in Mexico and 6.4% in Chile.
Three-year total return (July 2013–July 2016): -3.45%
Taking top spot in the sector over the analysis period is Roberto Lampl, who recently told Citywire Selector that he believes Dilma’s impeachment will set the stage for improvements in Brazil, but that this will take time.
Lampl currently has 39% of the fund allocated to Brazil and in a recent fund commentary, said every country the fund is invested in has delivered positive returns except from Colombia, which he has a 1.6% allocation to.
In terms of country allocations, Lampl has Brazil as his biggest bet, which is followed by 22.9% in Chile, 18.1% in Mexico, 11.6% in Peru, 4.6% in Argentina, a 2.2% regional allocation and 1.6% allocated to Colombia.
Unlike the other two funds in the top three, Lampl’s main sector allocation is food and beverages, which he has 21.8% of the fund allocated to. This is followed by industrials at 18.6%, and retailing at 8.7%.