Brazil is Bridgewater’s New Best Bet

March 21, 2019 James Heinsman Hedge Fund News

Until recently Bridgewater Associates, the world’s largest hedge fund has been a big investor in the China market. Another region has caught the interest of the $160 billion Connecticut- based fund, and that is Brazil.

Seal of Brazil

Analysts at Bridgewater recently told Reuters they have their eyes on Brazil and expect it to become the country with the “strongest growth potential in the world” come 2020.

They expect the South American powerhouse country to be far along on their road to recovery from a recession that peaked in 2015-2016. They explain that low foreign debt levels allow “plenty room for real yields to fall.” And due to a general feeling of pessimism about the market in Brazil, prices are cheap.

“Given that pricing already discounts extreme weakness and [local political] mismanagement, we think there is considerable room for Brazil’s economy and assets to surprise on the upside,” said the strategists Bridgewater, founded by Ray Dalio.

Skeptics might point to Brazil’s history as a country filled with corruption and reneging on government promises. The country has a new president, Jair Bolsonaro, a right-wing leader who is obsessed with bringing back to life the debt-ridden nation. The president’s first target will be the country’s pension system. Bridgewater strategists are also betting on Brazil’s social security reform.

Brazil, Bridgewater Associates, Jair Bolsonaro,

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