Investors from T. Rowe Price Group Inc. to TCW Group Inc are embracing a strategy that’s rapidly becoming the norm in emerging markets: pour money into Latin American countries aligned with US President Donald Trump.
Money managers at the firms are favouring government bonds from nations such as Ecuador and Argentina, whose leaders have forged close ties with the US administration, in what JPMorgan Chase & Co calls a “new reality” for the region.
The trade has been playing out since Trump returned to office last year, and gained traction after the United States detained Venezuelan leader Nicolás Maduro in early January. Instead of shying from the ensuing political risks, money managers poured into Venezuela’s bond market, sending prices to levels not seen since before the country’s 2017 default.
“We should expect the US to remain increasingly interventionist in Latin American politics,
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