JPMorgan Brazil, chaired by Howard Myles (pictured), has published its results for the year ended 30 April 2014. The figures make poor reading as the total return on net assets came in at -24.4% and the return to shareholders was -26.0%. The fund underperformed its benchmark, the MSCI Brazil 10/40 index, by more than 7% over the year as it returned -17.1% over the period and the discount widened to 9.1% (although it has narrowed since). Income fell and so the dividend was cut from 1p to 0.85p.
The managers say Brazil’s stock market weakness stemmed from currency weakness, disappointing earnings, weak commodity prices and government interference. They say that the fund’s underperformance of the benchmark was a consequence of being overweight in the industrials and consumer sectors and an overweighting to smaller companies. No individual portfolio holding is singled out in the report though the manager does say that being underweight in Petrobras and Vale relative to the benchmark was unhelpful.
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