Inflation, growth, valuations: Reasons to like Brazil

Lula election not a risk

Brazil has been one of our favourite emerging markets from late 2020, since when it has delivered strong USD total returns despite a significant negative return from the MSCI Emerging Markets Index.

October's election has returned Luiz Inacio Lula da Silva (Lula) as the president, a position he held from 2002-2010. As Lula is from the left-wing Partido dos Trabalhadores (PT), the Workers' Party, and given recent hostile market reactions to left-wing electoral successes in Chile, Colombia and Peru, is it time to change our view on Brazil? We remain very positive on Brazil in an absolute sense and relative to other emerging markets. We do not see a Lula administration as a material risk to Brazil's economy or to financial markets, and continue to find attractive investment opportuniti...