Brandywine's $1bn fund turns to Mexican & South African debt

Brian Hess, manager of the $998m Legg Mason Brandywine Global Fixed Income fund, has upped exposure to Mexican and South African government debt to drive returns in volatile markets.

Hess, who works for Legg Mason's US-based fixed income subsidiary Brandywine, has upped his position in Mexican debt from 4% to 6%, and his South African position from 2% to 3%, via a combination of 10-year and 30-year bonds. "One of the markets that we are really excited about is Mexico, where 20-year bonds have a 6% yield, inflation is 3.5% to 4% and the peso is undervalued," Hess said. "We also like South African bonds, where we own 10-year and 30-year paper on yields of 7.5% and 8.5% respectively. South Africa will likely be joining the Citigroup World Government Bond Index in Oc...