Yerlan Syzdykov: Argentina is the next Brazil

Barely a decade after its notorious budget default, Argentina is fund manager Yerlan Syzdykov's top emerging market investment tip.

By
published
in Features

For Yerlan Syzdykov, fund manager at Pioneer, the future is Argentinian. The Dublin-based investment manager, who oversees Pioneer's Emerging Markets Bond fund, recently revealed to Citywire that the country is his top investment tip.

It may not seem like an obvious candidate. It's barely a decade since its notorious default in 2002 and even Syzdykov (whose fund has returned 109% in the last three years compared to a 60.3% rise in its benchmark) admits that other investors fear the institutional crisis hasn't yet "come to an end" and that the country isn't "ready to take off in terms of growth potential". However, at 9.4%, Argentina currently counts as his fund's largest geographical holding higher than Brazil, which makes up 8.9%.

So why Argentina? While investors still see the "shadow of default" hanging over the country, Syzdykov says the government despite having its problems - is finally gaining control over its debt levels and rebalancing its budget through "orthodox policies".

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Moreover, as far as the devaluation of the Argentine peso is concerned, he believes the country is now "in a better position for exports in agricultural commodities" which should boost "Argentina's external position even more".

And it looks cheap. Brazil, currently the "darling of emerging market investors", looks set to come off the boil in 2012. By comparison, although Argentina is the country "people love to hate there is a relative value argument [there] and it is quite out there in terms of the spreads and the ratings to compensate investors for their patience."

Piper Terrett

Piper Terrett is a financial journalist and author. Piper graduated from Newnham College, Cambridge, in 1997 and worked for Germaine Greer and for Adam Faith’s Money Channel before embarking on a career in business journalism. 

She has worked for most top financial titles, including Investors Chronicle, Shares magazine, Yahoo! Finance and MSN Money. She lectures part-time at London Metropolitan University and is the author of four books. 

 

Latest