Home' Trinidad and Tobago Guardian : May 2nd 2013 Contents BG20 | COMMENTARY
BUSINESS GUARDIAN www.guardian.co.tt MAY 2013 • WEEK ONE
Bourse Securities Ltd is
pleased to announce the
opening of its offer of the
Bourse Brazil Latin Fund
tomorrow, a closed-ended
TTSEC- (T&T Securities and
Exchange Commission) registered fund
designed to unlock attractive equity and fixed
This fund is being launched at a time when
many investors are seeking increased yields
amongst uncertain traditional investment
markets. The new fund provides exposure
to the exciting and rapidly developing Latin
American region with a concentration on
the Brazilian economy, which overtook the
United Kingdom as the world s seventh largest
economy in 2012.
Following the launch within the last week,
this has sensitised the attendees of the
immense potential that lies in investing in
the fund. This particular piece is targeted
for the wider investing population as it seeks
to further educate on the benefits of invest-
Why invest in Brazil-Latin
Investors now looking for alpha and beta
can think about adding a little bit of samba
to their portfolio. With a steadily growing
economy, a stable financial market and a
liberal investment climate, Brazil has
untapped potential among the emerging mar-
During the recent global economic crisis,
Brazil proved to be a solid strong economy
and was one of the first emerging market
nations to recover from the crisis.
Brazil s recovery was mainly due to strong
domestic demand, which accounts for over
60 per cent of gross domestic product (GDP)
and government policies, which facilitated
domestic consumption growth. Brazil is one
of the largest consumer markets in the world.
Comparing GDPs, for the past three years,
Brazil has outperformed the Caribbean in
terms of GDP growth (Figure 1).
In the coming years, Brazil will be hosting
the 2014 FIFA World Cup and 2016 Summer
Olympics. These globally-recognised events
are expected to generate billions of dollars
In preparation for the events, infrastructural
developments are expected to increase, there-
by further increasing economic growth, gain-
ing foreign direct investment and decreasing
Looking at the wider region, Latin America
is in a position to continue to drive economic
growth and become a major player in the
world economy in the coming years, accord-
ing to the World Bank.
While Europe and the United States have
been mired in economic stagnation, Latin
America has enjoyed a strong recovery, having
for the most part sailed through the recession
without lasting damage. Boosted by capital
inflows, record prices for commodity exports,
sound economic policies and by a heady
expansion in domestic credit, the region saw
an average economic growth of five per cent
within the last year.
At the end of 2012 Latin America region
comprised six per cent of World GDP com-
pared to three per cent for India and United
Kingdom. Of this six per cent, Brazil s con-
tribution was more than half (3.4 per cent
of World GDP Figure 2). Brazil is ranked sev-
enth in terms of GDP in 2012.
Composition of fund
The fund provides diversification through
multiple asset classes and through geograph-
ical exposure to various Latin America coun-
tries with over 50 per cent exposure to Brazil.
It is a closed ended exchange traded mutual
fund. Units in the fund will be issued up to
a maximum of 5,000,000 units and will be
for a period of five years, thereafter provisions
have been made to convert the fund to an
open-ended fund. There will be a combi-
nation of US dollar, real and other currency
The fund will be denominated in US dollar
where investors can essentially buy and sell
their units in US currency over the TTSE,
the first to be traded on the US platform.
A blend of bonds, equities and an option
of investing in alternative investments as a
hedge will be utilised.
Funds like this Bourse Brazil Latin Fund
offer the following features to investors:
Portfolio diversification: The portfolios
can be diversified across many different
investments. This diversification may help
reduce an investor s risk by potentially off-
setting losses from some investments with
gains in others.
Also, keep in mind that diversification
cannot fully eliminate all risk inherent in the
portfolio, but will significantly reduce it.
Furthermore, with the use of fixed income
instruments in the portfolio, this will reduce
the volatility with is inherent in the equity
Investors are always advised to diversify
their portfolios, which, at the simplest level,
means "don t put all your eggs in one basket."
The idea is that when one investment in
your portfolio is performing poorly, it may
be offset by stronger performance by another.
The key to diversification is not the number
of different investments, but the type of
Lastly, US dollar instruments are more
attractive since they offer higher yields that
are currently available locally.
Talk to us
Determining whether this closed-end fund
such as the Bourse Brazil Latin Fund is an
appropriate investment strategy for you
requires an indepth evaluation of your indi-
vidual financial situation and the objectives
you want to achieve.
For more information on the investment
options available, speak to a qualified invest-
ment adviser, such as Bourse, before making
your investment decision.
This document has been prepared by Bourse Securities Ltd, for information purposes only. Any trade in securities recommended herein is done subject to the fact that Bourse, its subsidiaries and/or affiliates have or
may have specific or potential conflicts of interest in respect of the security or the issuer of the security, including those arising from (i) trading or dealing in certain securities and acting as an investment advisor; (ii)
holding of securities of the issuer as beneficial owner; (iii) having benefitted, benefitting or to benefit from compensation arrangements; (iv) acting as underwriter in any distribution of securities of the issuer in the three
years immediately preceding this document; or (v) having direct or indirect financial or other interest in the security or the issuer of the security. Investors are advised accordingly. Neither Bourse nor any of its subsidiaries,
affiliates directors, officers, employees, representatives or agents, accepts any liability whatsoever for any direct, indirect or consequential losses arising from the use of this document or its contents or reliance on the
information contained herein. Bourse does not guarantee the accuracy or completeness of the information in this document, which may have been obtained from or is based upon trade and statistical services or other
third party sources. The information in this document is not intended to predict actual results and no assurances are given with respect thereto.
Bourse Securities Ltd
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