There are many reasons to be negative on Brazil these days. The economy is barely growing, corruption scandals at Petrobras are being uncovered every day, commodity prices are in a free fall and there is eminent risk of power and water rationing. Even in soccer, Brazil’s aura has been tarnished, after a shameful performance in the last World Cup. Yet, when we look beyond the headlines, we see a different picture.
During this weak period, our exposure to Brazil keeps going up. We are confident that high quality companies with strong underlying fundamentals exist in Brazil today; investors have to dig a little deeper to find them.