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Investors Should Be Long on Brazil: Stock Picker

Brazil’s benchmark index, the Brazilian Bovespa, was up more than 80 percent in 2009, but has fallen 4 percent so far this year. So which way should investors bank on Brazil in 2010? Rob Lutts, founder and CIO of Cabot Money Management, shared his insights. (Scroll down to see Lutts’ stock picks.)

“You have to be long Brazil,” Lutts told CNBC.

“The situation down there is a really core growth to continue.”

Lutts said the middle-class incomes have been growing at 9 percent a year over the last 5 years and he expects the climb to continue.

“From an economic standpoint, we should feel confident that the situation will continue in a favorable mode,” he said. “The emerging middle class theme of consumption is where I’m focusing on.”

Lutts' Recommendations:

- Electrobras

- Itau Unibanco Holdings

For investors who do not want to buy individual stocks, Lutts suggested looking at the iShares MSCI-Brazil ETF.

  • Watch Lutts' Previous Appearance on CNBC (Nov. 25, 2009)

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Disclosures:

Lutts does not own shares of ITUB or EBR personally, but his clients own both of them.

Lutts personally owns shares of EWZ.

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Disclaimer