Investment funds have record funding in 2021 driven by fixed income

The increase in the basic interest rate, the Selic, and the return that came in the wake of investor interest in fixed income opportunities made the Brazilian investment fund industry record a historic fundraising record in 2021.

From January to December, a volume close to R$ 369 billion was raised by asset managers through investment funds, which corresponds to the highest value of the historical series started in 2002, and a growth of around 106.4%, compared to the 2020 result, according to data released this Thursday (6th) by Anbima (Brazilian Association of Financial and Capital Market Entities).

Fixed income was, by far, the largest responsible for the figures in the last 12 months, having alone recorded funding of R$ 215.2 billion, about 58.1% of the total.

According to Pedro Rudge, director of Anbima, due to the rise in the basic interest rate, the Selic, especially during the second half of 2021, the portfolio diversification process has lost strength in the last 12 months.

In 2020, when the Selic rate reached the historic low of 2% per year, the class of public and private bonds had redeemed BRL 38 billion.

“At times when we see changes in the return potential [da renda fixa] and advancing risk, it is quite rational and understandable for people to reallocate their assets a little. Eventually, the more invested investor in equities starts to feel a little more uncomfortable with the volatility that we have seen in the market. It’s normal to have this sorting brake when some indicator has a very strong behavior, as we saw the increase in interest rates, mainly in the second half”, said Rudge, during an online press conference.

As a result, the fund industry’s net worth reached R$6.9 trillion at the end of last year, an annual growth of 12.7%, with fixed income representing 37.1% of the total.

In turn, equity funds, which in 2020 had net inflows of R$73 billion, have seen investor interest wane more recently. Last year, when the Ibovespa closed with a drop of 11.9%, funds in the category raised only R$ 200 million.

A highlight is also the multimarket funds, where it is up to the manager to navigate in search of the best strategies at the mercy of market changes. The class raised BRL 59.6 billion in 2021, although well below the BRL 104.5 billion of the previous year.

In terms of profitability, the highlight is once again on account of fixed income funds — the strategy that allocates the portfolio to long-term securities and investment grade risk rating had a positive return of 11.8% in 2021.

On the other hand, portfolios in which managers have a free mandate to choose the stocks they believe have the best prospects had an average negative return of 10.7% in the period.

Breaking down by investor segment, retail presented a net inflow of R$ 121.1 billion, while institutional and public authorities contributed a volume of R$ 66.9 billion each.