Do you invest in stocks? Let me try to guess some of the stocks in your portfolio: Petrobras, Vale e Itau Unibanco. Am I right? If you answered yes, know that your profile as an investor in variable income is very similar to that of most of the main multimarket funds in the country.
In a universe of 900 of the most important of these portfolios in Brazil, most of the money invested in variable income is actually under a conservative umbrella. This is what a survey carried out by data consultancy Quantum for the InvestNews on the 15 most invested stocks monthly by funds, from January 2019 to April 2024.
This research shows that, in the multimarket success parade, there are four winning stocks: Petrobras PN, Vale ON, Itaú PN and Lojas Renner ON were present in the funds' portfolios during all 68 months of the sample. These are names so regulars in the wallets that, when reading the list, you must have felt a sense of already seen...
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Liquid and certain
You may be wondering: if stock choices seem so obvious, why would I need to use the fund? Multimarket funds, in fact, seek to obtain above-market gains by combining several asset classes, such as credit, foreign exchange, derivatives and commodities.
It may seem uninspired, but the preferred selection of multimarket managers actually makes sense. Having the ability to quickly adjust positions ends up being a preventive strategy, explains Insper Finance professor, Michael Viriato. This fixation on the most liquid stocks, that is, those most bought and sold every day, makes it easier to enter or exit a position.
The average daily trading volume of Petrobras PNfor example, was R$1.7 billion in August. However, during the month, there were peaks of up to R$3 billion. The figure is equivalent to more than five times the average financial volume of daily oil exports by Brazil.
In the same period, the second most liquid stock on B3 was Vale ONwith an average daily movement of R$ 1.6 billion. Next on the list of most invested securities by multimarkets, Itau PN had an average volume of R$866 million, while Lojas Renner ON traded R$427 million.
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The Coordinator of the Center for Finance Studies at FGV EAESP, Claudia Yoshinagarecalls that, as Petrobras, Vale and Itaú are the most traded on the Brazilian stock exchange, “naturally, they will have more money invested by the funds.” The specialist says she heard from a multimarket manager that his fund usually has difficulty putting money into shares with little liquidity, such as the so-called “small caps”, of smaller companies.
According to Claudia, even if portfolios decide to invest a small portion, such as 1% of their assets, it will take four to five trading sessions to build a position in a small cap. “The manager stops being competitive in this strategy because the market notices the movement right away.”
Bottomless return
In periods of stronger volatility, investors seek refuge in products seen as safer, such as fixed income. In the current period of high interest rates, multimarkets have suffered strong net withdrawals.
From January 2022 to August 2024, the class saw more than R$412 billion net flow out of the segment, according to data from the Brazilian Association of Financial and Capital Market Entities (Anbima). In the period, almost 680 funds ceased to exist.
Portfolio returns have been disappointing. Portfolios should benefit from active management, when managers have the freedom to change positions quickly and profit from upward movements in various markets. Strategies include fixed income itself, as well as stocks, currencies and even commodities. However, the CDI has been looking at the multimarket class in the rearview mirror in recent years.
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Anbima's Hedge Fund Index (IHFA), which tracks the main funds in the segment in the country, reveals how this performance ends up discouraging investors. The name of the benchmark refers to an international class of funds with characteristics similar to multimarket funds in Brazil.
The IHFA has ended 2021 with a return of 2,04% against a CDI of 4,42%. Em 2022, the game has changed. The Anbima index marked 13,66% and the conservative benchmark was a little below, in 12,39%. Last year, the multimarket indicator had a performance of 9,31%while the CDI showed a return of 13,04%.
In eight months of 2024the hedge fund index continues to lag. The IHFA from January to August accumulated returns of 2,51%. The CDI closed the eighth month of the year with an aggregate yield of 7,09%. The gap may widen, as the market expects new interest rate hikes by the Central Bank, with a consequent increase in the gains brought by the certificate.
Variable income X CDI
If multimarket gains, in general, have struggled to keep up with the CDI, it is not the fault of variable income. Of course, the fund strategies include diversification that can include dozens of stocks, but if we consider the four stocks preferred by most investment vehicles, we have an appreciation well above the CDI between January 2019 and September 6, 2024.
A portfolio with resources distributed equally between Petrobras PN, Vale ON, Itaú PN and Lojas Renner ON obtained a nominal return of 83,62% in the period. This result does not consider adjustments for inflation and extra gains from dividends distributed by companies. At the end of April, an average of 517 multimarkets held R$12 billion in these securities, an amount equivalent to Salvador's annual budget.
In those same 68 months, the CDI brought a nominal return of 55%. The appreciation of the portfolio with these four stocks also surpassed the Ibovespa, the main index of the Brazilian stock exchange, which had a gain of 53% in the period.
But if the group of most invested stocks beats the CDI, why did the portfolios fall behind? It is because within the logic of diversification in various classes, from stocks to fixed income, the greatest probability is that they have suffered setbacks in other markets.
In any case, beating the CDI with a basic interest rate in double digits is like a relay team racing against the 100-meter champion. All it takes is one baton falling for the team to fall behind. And that doesn't spare anyone. Not even Luis Stuhlberger's Verde Asset Management, which laid off 20% of its staff this week. The company, which had R$55 billion under management in 2021, now has R$21 billion.