Scottish Mortgage looks to profit from Brazil rate cuts

Trust boosts exposure to bonds in region in expectation interest rates will keep falling.

Tom Slater, deputy fund manager of the £2.2bn Scottish Mortgage investment trust, has been boosting exposure to Brazilian bonds in the expectation interest rates in the country will slowly begin to normalise. Last month, Brazil’s central bank unexpectedly cut interest rates 50 basis points to 12% as inflation began to slow.  Slater said inflation is slightly above the central bank’s 6.5% target at 6.9%, but is falling, and he suggested the central bank will therefore continue to cut interest rates. The trust has a 5.8% position in a Brazilian CPI-linked bond maturing in 2045 to exp...