LC Latam Capital AG

Latam Tigers Report February 2018

Latam Tigers performed -2,9% in February (USD I-share class). FX impact accounts for -47bp for the month. This brings YTD performance to 4,4%. Emerging Markets suffered in general with the MSCI EM down by 4,7% (MSCI Latam - 3,6%).

Concerns about rising inflation pressure in the US have had a negative impact on EM early in the month. We expect the economic fallout to be limited. EM debt dollar burdens are much lower than in the past tightening cycles and current account deficits have narrowed substantially since the Taper Tantrum in 2013.

Just at the end of Feb/early March President Trump has announced tariffs on steel and aluminium imports into the US. They are unlikely to have a major impact on EM (and even less so for Latam) but fears about increasing protectionism have shaken EM nevertheless. Volatility remains high for the moment.

Following the active month of january the Portfolio was not changed substantially and it was a quiet month. Mexico’s allocation was reduced by 1% on some profit taking in Gruma.

Minor profit takinkg in Mercado Libre and Vapores as well as increasing our postition in Suvpervielle were some of the few actions. Apart from this country & sector allocation remained nearly unchanged.

Most companies have reported Q4 and their results are very much in line with our expectations.

Argentina was the worst performing market and is nearly 8% down. Argentina has risen substantially in the past which makes it more sensitive to corrections. Also the inflation targets are not reached as quickly as originally expected.

The Mexican market follows by -6,8% which is explained by noise around the presidential elections and obviously the ongoing Nafta talks.

The best performing market was Brasil with -1,2%. Our stock picking has worked well in February and the contribution of our brasilian Holdings to the PF was positive.

Pls find more details in attached monthly report. Don’t hesitate to come back for any questions or remarks.

LC Latam Capital AG

Dr. Raoul-Ph. Bachmann

Mob +41 79 405 9450