Petrobras is a scandal-ridden company, but the oil giant is also a real asset to Brazil, said Kathleen Gaffney, portfolio manager for the Eaton Vance Bond Fund. Gaffney added that Brazil could potentially lose its investment grade credit rating in the next two years, so they realize the time is now to deal with corruption and fixing Petrobras will be a priority. She said the fund does not hedge the currency because they are long term investors and they plan to hold the energy bonds they picked up during the sell-off in the fourth quarter of 2014. Finally, Gaffney said a Fed tightening, which she expects to be pushed out until later this year, will hurt emerging markets selectively.
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