Risks for 2022 lead managers to bet on the stock market’s fall

Although the Ibovespa has already accumulated a drop above 10% in 2021, until October 12, managers are betting that fiscal and political uncertainties should make the losses continue for a while.

Among the funds that stood out the most in recent weeks of strong volatility, those with bets known in market jargon as “sold” have been stamped — positions structured via derivatives on B3 that gain in times of widespread share declines.

The Macro multimarket fund owned by Adam Capital, an asset manager, is an example of this. In October, when the stock market index had a drop of almost 7%, the fund rose about 4%.

“We have been sold on the Brazilian stock exchange for about two months, and we are more confident with the stock market in the US”, says André Salgado, founding partner of the manager.

The relationship between risk and return, he adds, has been much more favorable to the American market, when comparing indicators such as the expected level for economic activity and for the interest rate.

“Even though prices are reasonable in some sectors, the local market does not compensate for the risk in terms of opportunities abroad, where activity, corporate profits and monetary policy are more attractive,” says Salgado. He points out the technology and financial sectors among the main bets in the US.

Also with a position that benefited from the recent fall in Brazilian stocks, the Parcitas Hedge fund appreciated 4.2% in the month of October.

According to Marcelo Ferman, founding partner of the manager Parcitas Investimentos, the composition of the portfolio takes into account the sharp rise in interest rates in progress by the BC (Central Bank) necessary to control inflation.

Historically, says the manager, tightening cycles in monetary conditions are negative periods for the stock market’s performance.

The partner at Parcitas predicts that the interest rate should reach around 12% to 13% by mid-2022, and even so, with the BC struggling to deliver inflation in the center of the target. On the other hand, the double-digit Selic should favor an appreciation of the real, he adds.

Ferman says he is also finding better opportunities abroad, particularly in tech stocks like Amazon, Google and Salesforce, or in the S&P 500 stock index.

“We have to fish in the lake where there is fish. And we see Brazil in a very complicated situation, in which it is necessary to do underwater fishing to find good opportunities”, says the manager.

Rogério Xavier, founding partner of SPX Capital, said during an event at Genial Investimentos on Wednesday (10) that he also had short positions on the local stock exchange and long in the dollar in his portfolio — the manager’s Nimitz multimarket fund rose 1.7% in October .

“The price [da Bolsa] it needs to change in order to call a new buyer, be it me, the foreigner or individuals,” said Xavier, adding that the rise in interest rates on the global stage should contribute to further increase market volatility. with better prices to put in the portfolio.”

Opportunity Total fund managers say they reversed their exposure to the Brazilian stock market in October, adopting a tactically short position.

Premiums have not yet fully incorporated the environment of renewed fiscal uncertainty, abrupt economic slowdown and significant monetary tightening, wrote the multimercado’s management team, which rose 1.4% last month.

Marcos Mollica, the fund’s manager, points out that October inflation came in significantly above economists’ consensus – 1.25%, down from 1.06% – with surprises spread across various components indicating greater persistence of the price shock.

“In this context, we believe that pressure is growing for the Copom to accelerate once again the cycle of interest rate hikes, possibly to 2 percentage points in the next meeting and in the subsequent meeting, to close the cycle with the Selic rate at 11.75%” , predicts Mollica.

At Ace Capital, managers say that, at a time when the ceiling was tight and would fulfill its role of forcing the government to make policy choices to increase efficiency, they opted for the easy and populist path.

“This, in practice, sets a dangerous precedent, which most likely decreed the end of the spending ceiling,” said Ace Capital managers in their October letter, when the home fund rose 1.2%.

Luiz Missagia, Ace’s stock manager, says that in addition to carrying short positions on the Ibovespa as a form of protection for the portfolio, he has specific bets on some shares that he considers with excessively salty prices. Rede D’Or, Cemig and Ambev are among them.

In the case of Blue Line Asset Management, the assessment of managers is that asset prices already go back to the levels of the government of former president Dilma Rousseff (PT). This does not mean, however, that further losses cannot occur.

“We continue with a very negative opinion in the country, and operating slightly short on the stock exchange and long in dollars against the real”, write the managers of Blue Line in the fund’s management letter, which rose 2.7% in October.

After having promoted a significant reduction in risk between August and September, managers say they have increased their positions in recent weeks, prioritizing the US stock market.

In the experts’ view, the balance sheet season in the US, with robust corporate results, has contributed to the good performance of stocks there.

In the same vein, Carlos Eduardo Rocha, manager of Occam Capital, said during an Empiricus event on Tuesday (9) that he has also been carrying bets sold on the Ibovespa, which have been reverting into gains for the portfolio — the Occam Retorno Absoluto fund had a high of 1.6% in October.

Rocha said that the more adverse global scenario, with pressured inflation and reduced stimuli, tends to penalize mainly emerging countries, such as Latin American and Eastern European countries.

The manager said that he carries positions that benefit from the cycle of rising interest rates globally, and the fall of the stock market, having a more favorable view for US equities.

“There is an upward trend abroad, and a downward trend here in Brazil,” said Rocha. He stated that around 80% of the fund’s risk is directed to the international market.