Boletim de Fundos de Investimentos

Fund industry sees R$ 25.9 bn outflow in June

In June, the investment fund industry saw a R$25.9 billion capital outflow, the segment's worst monthly result since October 2008. In the first half, the result remained positive, with net inflow at R$36.4 billion compared with 129.3 billion for the same period in 2017.

Among the fund classes, only the exchange-rate funds saw net inflow in June (R$982.2 million). The largest net capital outflows were in Fixed Income, with redemptions of R$15.9 billion in June and R$21.8 billion in the year to date. Balanced/Mixed funds went in the same direction, with an R$11.4 billion outflow in the month, but maintaining the positive balance in the first half (R$33.6 billion). The same happened with equity funds, which lost R$1.8 billion in the month and saw net inflow of R$18.6 billion in 2018.

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The types of fixed-income funds that posted the largest outflows in June were the free duration - investment grade (R$11.5 billion) and indexed funds (R$7.7 billion), while in the year to date redemptions totaled R$18.2 billion and R$5.3 billion, respectively. The deterioration of political and economic expectations from the end of May has increased investors’ risk aversion, mainly due to the uncertainty surrounding the upcoming presidential elections, reflected largely by higher volatility of asset prices. This environment coupled with the prospect of low interest rates in the short and medium terms has turned the scenario challenging for fixed-income funds.

For the balanced/mixed funds, the negative results in the last two months may lead to a revision of strategies of greater exposure to risk that these classes have been adopting since the second half of last year, as a result of a sharp fall in the economy’s interest rates. The possibility that the more hostile environment lasts longer will require a reallocation of funds in these portfolios that could mitigate risks and recoup recent losses. The Balanced/Mixed - Macro type (R$3.9 billion outflow in June), which maintains strategies in tune with changing scenarios, may show windows of opportunity. Its positive record in 12 months -- R$29.5 billion raised and an 11.38% return - ratifies these bets. The Balanced/Mixed - Free type posted a positive result, with inflow of R$2.0 billion in June, and R$22.3 billion raised in the year to date.

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Investment funds’ yields were impacted by the negative performance of longer-term assets, reflected in the IMA sub-indices. The IRF-M1+ (prefixed above one year) and IMA-B 5+ (NTN-Bs above five years) fell 0.15% and 1.08%, respectively. The Long and Short - Neutral type, which maintains the best performance among balanced/mixed funds in the year to date (7.34%), posted a 0.79% gain in June. The Balanced/Mixed Long and Short - Directional shrank 0.14% in the month, accumulating a 5% return in the first half. The Ibovespa's negative trajectory compromised the equity funds’ performance -- all types showed negative return in June. The Equity - Free Portfolio type, with the largest equity assets, declined in the month and in the year: 3.75% and 3.46%, respectively.