Populism and protectionism seem to fade away from Brazil and Argentina. Michael Hasenstab, the Franklin Templeton’s star bond fund Manager, is convinced that Brazil and Argentina could be a “safe haven” to the nationalistic trend growing in Europe and USA.
Franklin Templeton recently committed 35% of its $41 bln Global bond fund to Latin America. Michael Hasenstab states why he believes it’s the right momentum to invest in Brazil and Argentina as those countries learned from the mistakes of the past: “Populist and protectionist policies led Argentina and Brazil to economical collapse, runaway inflation and social chaos”! The wind seems to blow in another direction now: Brazil and Argentina are reversing 180 degrees. Indeed, highly skilled technocrats are sourced in Governments and appropriate fiscal policies are put in place.
Hasenstab concludes in one of his interviews about Brazil and Argentina: “I believe this is one of the rare periods where you can get lower inflation, higher growth and a return dynamic driven by what is going on domestically vs internationally”.