Barings manager to pare down portfolio

Baring Latin America fund manager Mike Simpson is preparing to reduce the number of holdings in the fund as he approaches the six-month anniversary of his taking over.

Simpson, who took over management of the $676.2m (£432.9m) fund in October, is to reduce the number of holdings.

He says: “We are looking to concentrate the portfolio down to around 45 high-quality holdings from previous levels of 64 as at the end of 2011, to focus on ideas where we have our strongest investment conviction.

“We are seeking to maintain 70-80% of the portfolio in core long holdings with 20-30% in more tactical holdings.”

Simpson says he is currently bullish on Brazil and Chile and is currently seeing opportunities in Columbia.

He says: We continue to maintain the majority of our holdings in Brazilian stocks, which we have seen provide a strong rebound after market falls.

“The stocks are currently attractively valued, with Central Bank easing and pro-growth fiscal policies supporting the macro economy.”

Simpson says price-to-earnings ratios in Chile are currently at a “multi-year low”.

He adds: “We are keeping an eye on Colombia where, after a couple of years of underperformance, valuations are again becoming reasonable.

“Following a period of monetary tightening, inflation readings are stabilising, and so we are looking to increase our holdings through the consumer discretionary sector.”