Brazil’s fund industry surviving the Covid-19 crisis

Despite the steep volatility that wiped away the equivalent of two years of gains for the São Paulo stock market and led the Brazilian Real to plummet, Brazilian investment funds managed to raise BRL 11.8 billion in the first twenty days of March, according to data provided by the National Association of Financial and Capital Market Entities (Anbima).  

Surprisingly, variable income-focused products registered a positive influx of money, with stocks funds raising BRL 5.8 billion, more than enough to compensate for the BRL 5.3 billion loss in fixed-income products. Exchange-traded funds (ETFs) — stock indexes traded as stocks — were another highlight, with a positive balance of BRL 6.49 billion.

The data becomes even more surprising when analyzing some of Brazil’s most famous funds. Stocks funds Alaska Black FIC FIA – BDR Nível I — famous for its volatility as well as the double-digit gains — has seen its share price drop by almost 60 percent in the month as of March 26. The funds’ net worth melted from BRL 3.168 billion to BRL 1.317 billion in the same period. In spite of that, the fund has attracted 15 new investors in the same period.

Moreover, major funds, that have been...