Sprott Boosting Bets on Mexican Debt Bonds

February 25, 2014 Marcus Black Hedge Fund News

Canadian hedge fund manager Michael Craig is heading south of the border to buy Mexican government debt. Craig, fixed income portfolio manager at Sprott Inc, sees the demand for Mexican oil is on the rise, weakening demand for the Canadian commodity. The move is part of an overall strategy that Sprott is embarking upon to strengthen its fixed-income portion in balanced funds up to 30 percent from its present 25 percent, says John Wilson, Sprott’s co-chief investment officer. Sprott made its fortune investing in gold and mining stocks.

“Over time a U.S. recovery is going to benefit Mexico far more than Canada,” Craig said in a Feb. 19 interview in his office. “They don’t have the sensitivity to a slowing Chinese economy; they’re much more plugged into the United States.”

Sprott was founded by gold aficionado Eric Sprott in July 2010 when he began investing in bonds. The fund manages about 7 billion in Canadian dollars. The 25 percent decline in gold over the past two years has helped to improve the popularity of bonds. Sprott, along with Craig and Scott Colbourne, co-chief investment officer, led their index of emerging markets and high-yield company bonds to a 17 percent yield during the same period.

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