Multimarket funds give the highest return in 2022; see investment ranking

In a year of inflation and historic high interest rates in the main global economies, Brazilian investors who opted for protection managed to escape the loss, shows a survey by the TradeMap platform with some of the most popular financial applications in the domestic market.

With an average annual return of 13.34%, multimarket funds delivered the best return in 2022, according to the IHFA, which is the hedge fund index of Anbima (Brazilian Association of Financial and Capital Market Entities).

Those who invest in a hedge fund, or coverage fund, allow a manager to invest in the most varied segments of the market. While the strategy between each fund can vary greatly, diversification is intended to provide protection even for unlikely scenarios. Something that made sense in a year when even the threat of a nuclear catastrophe was highlighted in the news with the outbreak of the War in Ukraine.

The survey carried out at the request of the Sheet considered benchmark indices and popular assets, which means that some specific investments may have outperformed or underperformed those in the ranking.

“The year 2022 marked the rebirth of the multimarket fund class, supported by strategies that benefit from high interest rates and commodities, not only in the Brazilian market, but globally, after years of dominance by stock funds driven by policy of low interest rates from central banks and the enduring rally in technology stocks,” commented Nicolas Borsoi, chief economist at Nova Futura Investimentos.

The second indicator on the list, the Idiv-B3 (Dividend Index of the Brazilian Stock Exchange) advanced 12.65%. As its name suggests, the index reflects the average performance of assets that stand out for their remuneration to investors, in the form of dividends and interest on equity.

Investments linked to interest rates negotiated between banking institutions occupied third place on the 2022 podium. . It is a situation consistent with the tightening of credit promoted by the Central Bank to slow down inflation. The Selic, the economy’s basic interest rate, closed at 13.75%.

With the Central Bank increasing the premium paid for Treasury bonds —to take capital out of the real economy and thus curb inflation—, public debt was among the best investments. Composed of securities that reproduce the country’s debt, the Anbima Market Index, known by the acronym IMA-Geral, advanced 9.61% and ranked fourth in the TradeMap ranking.

Savings, the most popular application among Brazilians, yielded 7.9% and ranked fifth, far surpassing investments that traditionally used to deliver much more than the traditional savings account.

With two weeks of recovery at the end of this year, the Ibovespa, a benchmark for shares traded on the country’s Stock Exchange, ended 2022 up 4.69%. Demonstrations that the government elected by Luiz Inácio Lula da Silva (PT) in recent days will maintain a certain level of commitment to fundraising helped to get the Stock Exchange out of the red in a year in which stocks were severely hampered by high global interest rates and turmoil domestic policies.

Last placed among the investments that closed in the black, real estate funds rose 2.22%, according to the B3 Ifix.

who did damage

In the exchange rate, the dollar and the euro fell by 6.50% and 11.93% (considering the Central Bank’s Ptax), respectively. It should be noted that the Ptax, used in the TradeMap survey, may present some difference when compared to other exchange rates. The commercial dollar, for example, ended 2022 with a drop of 5.3%.

Even gold, the refuge of many investors in periods of turmoil, lost 8.48%.

Still on the stock market, the year was cruel for investors who bet on companies with greater growth potential, small caps, which fell 15.06%.

This is a segment of the stock market that depends even more on low interest rates for growth, as in addition to facing competition from fixed income, like any variable income asset, the companies represented by these stocks also need cheap credit to invest and to grow.

The shares of foreign companies traded in Brazil through BDRs (Brazilian Depositary Receipt or Recibo de Valores Mobiliários) also fell in 2022. The BDRx, the Stock Exchange index that tracks these assets, lost 28.05%.

The purpose of a receipt that represents the performance of a share abroad is precisely to allow Brazilians to have easier access to companies that trade their shares on foreign stock exchanges, mainly the American ones.

The highest inflation recorded in the United States in four decades and a historic rise in the country’s reference interest rates led the SP-500, which is the reference indicator for the New York Stock Exchange, to collapse by almost 20% this year.

“At the beginning of the year there was even an expectation that American inflation would be transitory, but the high prices proved to be more and more permanent”, commented Lucas Serra, analyst at Toro Investimentos.

“Interest rates, which were at 0.25% per annum in March, were raised to between 4.25% and 4.50% throughout 2022. This was one of the largest interest rate increases in recent US history. , second only to the rise registered in the early 1980s,” said Serra.

Nothing has performed as poorly, however, as bitcoin, the best-known among currencies created by stringing together sophisticated computer code and having no physical representation. The cryptocurrency melted 66.79%.

The explanation also lies in the end of the abundant supply of very cheap credit made available in the critical moments of the Covid pandemic by the main central banks, such as the Fed (Federal Reserve, the American monetary authority).

“The crypto sector is part of the volatile asset class and at a time of lower liquidity
in the markets and risk aversion, these assets tend to be neglected by most investors.
investors, who prefer assets like the dollar and fixed income”, explained Ayron Ferreira, chief analyst at Titanium Asset Management.

“The clearest start of a new bullish cycle for cryptoassets should come when the Fed changes course and starts talking about cutting interest rates,” said Ferreira.