Populist policies and the poor performance of dollar-denominated bonds are reportedly driving US investors out of Latin America.
Brazil, Mexico, and Argentina alone lost US$33 billion in investments this year, reported Merco Press, citing a recent report from the US Department of Treasury.
Rising poverty, inflation, and uncertain policy decisions seem to be other factors causing anxiety among foreign money managers.
Considering the report, the US investors are fleeing bonds, equities as well as the region’s currency markets.
A recent survey of money managers by HSBC confirms this growing anxiety. “Of the 164 surveyed, just 43% said they had overweight positions in Latin America, down from 70% in January,” reported Bloomberg citing the report.