BARING funds are in second and third position on a Micropal ranking of the best performing authorised Latin America funds. The Baring Global Emerging Markets Fund had returned 60.9 per cent for the calendar year to the end of August. Next was the Baring Latin America Fund, which had returned 59.9 per cent. According to information supplied by Baring, the Global Emerging Markets Fund was set up in February 17 and had about US$280 million invested in it at the end of August. About 19 per cent of its assets were in Mexico, 15 per cent in Brazil, 11 per cent in South Korea, nine per cent in India and six per cent in the Philippines. The remainder was in a string of smaller holdings in most of the emerging markets of the world. The Baring Latin America Fund had $95.9 million under management and was 41.1 per cent invested in Mexico at the end of July. The next biggest investment destination was Brazil, where 18.3 per cent of the fund was invested, then Argentina with 15.1 per cent, Chile with 12 per cent and Peru with 6.8 per cent. Both Baring funds have returned about 44 per cent since inception. Baring International Fund Managers' marketing director Lin Yoke Seetoh said politics had been the main factor behind the dramatic performance of Latin American markets. 'In Mexico, [President-elect Ernesto] Zedillo's victory is positive for the market, especially in the medium to longer term,' she said. 'However, we do not expect the stock market to go up much in the short term, given that the index has risen more than 20 per cent since July 20.' Baring remains positive on the Mexico market's fundamentals. It is trading at 12.5 times 1995 earnings. Ms Seetoh said she expected greater action in more risk-averse currency and fixed-income markets. The return of flight capital that left the country in the three months before the election would put downward pressure on interest rates and strengthen the currency.