Jane Brauer, Claudio Irigoyen & team Bank of America Merrill Lynch First-place appearances: 2
Total appearances: 14
Team debut: 1993 Dubbed “the best strategy people out there” by one money manager, Bank of America Merrill Lynch’s New York–based researchers under the guidance of Jane Brauer and Claudio Irigoyen repeat in first place. The three analysts forecast that “the biggest determinant of sovereign-debt performance in Latin America will be the weighting and bond selection in highly volatile Argentina and Venezuela,” says Brauer. In Argentina the application and interpretation of the many court rulings related to the pari passu clause in sovereign bond contracts and the government’s response is expected to “provide both volatility and opportunities as Argentina looks to regain access to the capital markets ahead of next year’s presidential election,” she adds. (In June, the U.S. Supreme Court rejected Argentina’s appeal of appellate court rulings which held that, under the equal footing clauses of defaulted bonds, the nation could not make payments to bondholders that participated in restructurings related to its 2001 default unless it also paid the $1.33 billion owed to creditors that refused to exchange their defaulted bonds.) Performance in Venezuela, meanwhile, is likely to be driven by the effective implementation of currency devaluation, she adds, as well as controlled spending and cabinet staff changes that will lead to better and more market-friendly policies with greater disclosure. Accordingly, even though the researchers are more conservative on Argentina, they advise clients to gain exposure to both high-beta countries, recommending curve steepeners in the two markets. Regarding the low-beta countries, Brauer reports that the BofA Merrill group believes spreads are too tight in Mexico and finds more value in Brazil. This year, Irigoyen also co-leads, with David Beker, the No. 2 team in Local-Markets Strategy.