Many investors who invested in Brazil have been disappointed these last few years about the lack of growth and progress in the country. GDP barely grew in 2014 in Brazil, for example, which is a huge difference with the 7.5% growth the country put forward in 2010. According to Mark Mobius of Franklin Templeton Investment, the country is still full of promise and it can realize higher growth figures, if it wants to.

Contrarian pick

Brazil needs to work through a few problems, clearly, but Mobius is a lot more excited about the future of Brazil as an investor compared to 6 months ago. That is, among other things, the result of the fact that almost all other investors have gotten so negative.

Mobius’ position is simple: buy when others are desperately selling en sell when others are buying. This requires fortitude, but ultimately it offers the greatest reward. The investor listed a few core advantages of the South American country:

• It’s the 6th largest economy in the world by GDP and the 5th by population.
• Since 2003, about 36 million people have risen from poverty and joined the middle class.
• The demographic trends look good, with a median age of 30.7 years.
• Unemployment in Brazil has dropped below 5%, an historical low.
• The country’s economy is diversified and can profit from many natural resources.
• Education is a priority in Brazil and more than 90% of the population is literate.

After the victory of president Roussef last year, he appointed a new economic team to regain the trust of investors. Although Mobius was skeptical at first about the odds that Brazil would change, it now looks like the new leadership in the country is working on the health of the government and measures like higher taxes and cutting subsidies here and there.

The results will probably not be visible tomorrow, but Mobius believes that the climate for investors will be much better in 5 years, maybe sooner. By that time a big chunk of the young Brazilian population will be graduated and well-educated.

Moreover, the growing consumer market is taking advantage of new technologies like mobile and recent investigations regarding corruption will end up in meaningful reform.