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
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
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."
