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Please note: The Frank Talk articles listed below contain historical material. The data provided was current at the time of publication. For current information regarding any of the funds mentioned in these presentations, please visit the appropriate fund performance page.

Brazil’s Plan to Accelerate Growth

April 1, 2010

President Lula de Silva of Brazil has big plans for his country’s energy sector.

Brazil 040110

Lula proposes to spend $255 billion on energy between 2011 and 2014, and another $344 billion in the years after that. The goal is to secure a reliable supply of energy, and would include expanded electrical grids, oil and gas exploration, renewable sources and improved energy efficiency.

Brazil PAC 040110Energy represents nearly 70 percent of the $872 billion allocated to Brazil’s latest economic growth program, known locally as PAC 2. Other areas of focus for the plan are housing, transportation and general quality-of-life improvements.

The need is certainly there – last fall we highlighted some of Brazil’s infrastructure gaps, as observed by our global strategist Jack Dzierwa when he traveled there.

But what about the funding? Brazil has a relatively small tax base and its public debt-to-GDP ratio of 67 percent is relatively high among other key Latin American economies. Lula’s plan would require a tax hike or more debt on the national balance sheet.

Another potential hurdle is this year’s presidential election. Lula can’t run again, but he is throwing his weight behind Cabinet Chief Dilma Rousseff – if Rousseff wins (she now trails in the race), the plan’s chances improve.

Net Asset Value
as of 10/27/2021

Global Resources Fund PSPFX $6.88 -0.14 Gold and Precious Metals Fund USERX $12.49 -0.09 World Precious Minerals Fund UNWPX $4.75 -0.01 China Region Fund USCOX $8.47 -0.10 Emerging Europe Fund EUROX $7.42 -0.14 Global Luxury Goods Fund USLUX $25.47 -0.09 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $1.99 No Change