NEW YORK (TheStreet) -- A slate of better-than-expected economic reports in Brazil should calm inflation fears and boost stocks this summer, says Nick Robinson, manager of the Aberdeen Latin America Equity Fund (LAQ). Among Robinson's favorite Brazilian picks are Ultrapar Holdings (UGP), Petrobras (PBR) and Banco Bradesco (BBD).
The $287 million closed-end fund, which has recently been trading at a 9.9% discount to its net asset value (NAV), has seen its price rise 7.2% over the past year. The NAV of the fund has risen 6.2% over the same period. The fund doesn't employ leverage and generates an annual distribution rate of 4.8%.
Welcome to TheStreet's Fund Manager Five Spot, where America's top mutual fund managers give their best stock picks and views on the market in a five-question format.
Why are you confident about the trajectory of Brazilian stocks this summer?Robinson: We could be in for a slightly better phase for Brazilian stocks as one of the main worries that the market has had recently has been over inflation, and potentially that Brazil was going suffer from another inflation problem. More recently, there has been some good economic data that suggest this problem isn't going to arise. And with that concern gone, Brazilian equities can start to perform a bit better. Has Brazil finally decoupled from the U.S. and coupled with China? Robinson: There's a certain amount of that going on. China recently became Brazil's top trading partner so Brazil's link with China is more important than the link with the States. But the U.S. is still a very important trading partner to Brazil, so the health of the U.S. economy is still quite important. The banking sector in Brazil is certainly on the rise. Why is Banco Bradesco your favorite Brazilian financial? Robinson: We like Bradesco because it's a good way of playing the growth of domestic demand in the economy that's driven by the growth of the middle-class consumer. As more consumers get jobs, enter the middle class, make bank accounts and take out loans, it really powers that bank's earnings. And Bradesco is a very well-operated, high-quality lender with a good history of lending through the cycle, which is particularly important when looking at banks in Brazil.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV