Though four countries comprise the makeup of BRIC, the powerhouse quartet poised to dominate the global economy, it's China that has hogged most of the media limelight these past few years. The Big Red hype can be distracting, but don't forget about the South American constituency when you're planning your portfolio.

With a steadily growing economy, a stable financial market and a liberal investment climate, Brazil should be on your radar, if it isn't already.

As China and India continue to grow, so too will their appetite for consumption of energy and food; Brazil, on the other hand, is one of the few countries able to supply those much-needed resources.

Brazil has long been a leading supplier of agricultural staples like sugar and coffee; what's more, it's one of the few countries self-sufficient in oil. Add to that its one-fifth share of the world's fresh water supply, and Brazil is essentially "insulated against the world's main shortages," according to British investor Jim Slater.

But it's not always sunny south of the equator -- investing in Brazil also comes with its share of near-term risks. For one, a bloated and arguably corrupt public sector that drains a disproportionate amount in taxes from its citizens. Labor laws are restrictive, and there are some pretty serious infrastructure problems, including power shortages. And because Bovespa, its stock market, is highly sensitive to foreign capital flows, it can see adverse affects from global events with no direct connection to the country.

Want to add a little Latin flavor to your portfolio? You don't have to wait to see a profit off Brazil -- see which stocks offer an opportunity in the near term.

To help you get started, we've crunched the numbers and identified the Brazilian stocks that have seen the largest institutional inflows over the last three months. If you want to analyze these ideas, click here to access a free interactive tool.

Here is a list of the smart money's favorite Brazilian stocks. Data sourced from Reuters.

Company

Shares Held By Inst. Investors

Shares Held By Inst. Investors 3 Months Ago

% Change Over 3 Months

Telecomunicacoes de Sao Paulo S.A. (NYSE: TSP)

6,269,692

5,006,607

25.23%

GOL Linhas (NYSE: GOL)

31,369,885

26,282,871

19.35%

Cosan Ltd. (NYSE: CZZ)

114,323,747

100,201,149

14.09%

Cia Energetica de Minas Gerais (NYSE: CIG)

152,490,335

134,114,168

13.70%

Itau Unibanco Banco Holding (Nasdaq: ITUB)

787,448,433

706,723,426

11.42%

Banco Bradesco S.A. (NYSE: BBD)

496,660,956

451,114,824

10.10%

Companhia de Bebidas Das Americas (NYSE: ABV)

9,177,835

8,500,997

7.96%

Interactive Chart: Press Play to see how the market caps of these stocks have changed over the last two years.


Kapittal's Eben Esterhuizen and Alicia Sellitti don't own any companies mentioned.

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