Regional Currency Investment Perspective on Latin America
appeals of currency funds to investors is their non- correlation to other asset classes. Nonetheless they are conscious that it is not easy to always achieve positive performance in currency strategies, so in times of QHJDWLYH SHUIRUPDQFH LW LV GLIÀFXOW WR FRQYLQFH WKHLU investment committees to enter into a new asset class.
“We mainly focus on investors in Brazil, Chile, Colombia and Panama - the
strongest markets but also Peru which has been growing very strongly.”
Retail investors Retail investors are, however, less FRQVWUDLQHG DQG WHQG WR EH PRUH ÁHHW RI foot. The latest annual Cap Gemini Merrill /\QFK :RUOG :HDOWK 5HSRUW ÀQGV WKDW Latin America’s high net worth individual population grew by more than six per cent in 2010. Their wealth itself was up over nine per cent. “There is now more money,”
MAXIMILIAN SPIESS
According to Ismael Perez the investment vehicle and the strength of its regulation is a key selling point. He says that previous currency schemes that have been sold out of Colombia and Panama turned out to be fraudulent. So when Aqua Advisors began representing FX Concepts UCITS III funds they found that investors wanted to hear what they had to say. At the same time currency preferences among institutional investors continue to include Euro, Dollar and especially Swiss Franc. Moreover one of the key
FRQÀUPV 0D[LPLOOLDQ 6SLHVV ´:H PDLQO\ IRFXV RQ investors in Brazil, Chile, Colombia and Panama - the strongest markets but also Peru which has been growing very strongly. In Brazil a millionaire is made everyday. There is more wealth to be invested in alterative investments plus people who have a larger amount to invest look to alternatives to diversify their portfolio.”
As for institutional investors, funds subject to strong regulation and managed by well-known and established providers are a key attraction. Moreover, retail and institutional investors alike will look at alternatives of all sorts but allocations to them, across all such assets classes are likely to be of the order of 10% of their portfolios. “Currencies are viewed as
Correlations with the S&P 500
80 Currency Investor | Autumn 2011
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