Allianz RCM Brazil fund

Andy Parsons, advice team manager at The Share Centre, gives his thoughts on the newly launched Allianz RCM Brazil fund.

"Finally investors have the opportunity to invest predominantly in Brazil, thanks to the launch of the Allianz RCM Brazil fund. As economies around the world continue to struggle to stimulate growth and identify ways to reduce debt mountains, they could learn some lessons from the economic reforms Brazil underwent from the mid-1990s.
"It won't have escaped many investors attention that the country is also going through a residential election and despite no outright winner in the first round, the winner is unlikely to change the country's direction.

"In terms of investor opportunity, the region is still seen predominantly as a play on commodities.  However, it is the fifth largest country in the world, has favourable demographics, a buoyant middle class, rising employment and wages, and is currently the second largest destination within the emerging markets for foreign direct investment.  Brazil is also hosting the 2014 World Cup and the 2016 Olympics.  Combined, these things create a strong internal consumer demand that helps strengthen Brazil as an economy.

"The launch of the Allianz RCM Brazil Fund completes the BRIC jigsaw, with an Open Ended Investment Company (OEIC) now available for each BRIC country.  It is the first within the UK investment funds arena and will be managed by the successful Allianz emerging markets team, lead by Michael Konstantinov, who has achieved great success with the Allianz BRIC fund.  Konstantinov's team will look at all investment opportunities, and it should be of no surprise to investors if they see overweight holdings in mid and small caps, along with non-benchmark stocks.

"For those investors prepared to accept a higher degree of risk and volatility Brazil should offer the potential of a decent reward in the longer term."