Investment fund industry faces outflows of R$64bn in May
The investment fund industry had net outflows of R$64 billion in May, shrinking the year-to-date amount to R$30 billion from R$94 billion. The result mirrors net redemptions in the sector’s top three classes: fixed income, balanced/mixed and equity. In the first five months of 2021, the mutual fund industry had showed inflows of R$206.1 billion.
Investors pulled R$22.3 billion out of fixed income in May but two funds alone accounted for all redemptions: the Simple and Short Duration - Sovereign types. Amid rising interest rates, fixed-income funds keep luring investors and have received R$98 billion in net funding so far this year.
The Balance/Mixed class saw net outflows of R$12.2 billion in May. In the first five months, Balanced/Mixed funds lost R$55 billion - the class had monthly redemptions of R$11 billion on average compared to an average inflow of R$414.2 billion in the same period in 2021.
As for the Equity class, there were outflows of R$9.4 billion in May, most of which (R$4.7 billion) due to redemptions in the Equity – Free Portfolio type, which does not have in its mandate a specific strategy. In the year through May, net outflows in the class amounted to R$47.4 billion.
With Brazil’s policy rate at 12.75%, the Equity class snaps five months in a row of redemptions while the category’s net assets shrank 11.6%. It’s a sharp contrast with the same period a year ago, when its net assets had increased 12.2% from January to May with the Selic rate at 3.5%.
In terms of the industry’s top returns, the Fixed Income Long Duration – Investment Grade gained 1.27%. The Balanced-Mixed type rose 1.55%, while the Single Equity Fund, whose strategy is to invest in the stock of a single company, jumped 6.2%.