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How to Ride Brazil's 2012 Rally
21 Feb 2012 EST - CNBC.com
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If you're looking for a market that is up almost three times the Dow in 2012, look to Brazil.

Brazil's Bovespa has advanced some 17 percent this year, after slumping 17 percent in 2011.

"Latin America was held back by Europe, and as the LTRO [ECB lending] program took the pressure off funding needs in Europe, Brazil was a beneficiary," says Will Landers, who manages more than $6 billion in BlackRock's Latin American funds.

A better overall global economic environment—renewed optimism in Europe and the U.S.—and lower rates in Brazil are helping its markets. And it's not just Brazilian stocks investors are chasing, but also fixed income. Some $18.6 billion moved into Brazilian corporate and sovereign debt in the first six weeks of 2012, says Flavia Cattan-Naslausky, an analyst at RBS who specializes in Latin America.

“There's been a shift to risk sentiment,” she says. “Liquidity is out there and needs to be put to work to regions that have high economic growth and are providing attractive yields.”

Brazilian-denominated bonds, for instance, offer more than 10 percent annualized yield within a 2-3 year period, while the U.S. 5-Year yields less than 1 percent.

So how can you tap Brazilian markets?

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