The hope that 2026 would be a positive year for multi-market funds , after a crisis that removed R$ 790 billion from the industry in the last four years, was called into question at the end of February, when the United States and Israel launched attacks against Iran.
At a time when some managers were beginning to recover portfolio profitability and see an opportunity for good returns this year, given the prospect of falling interest rates in Brazil, the war in the Middle East caught most of them unprepared.
A survey by the consulting firm Elos Ayta, commissioned by NeoFeed from a group of the 264 largest multi-market funds, shows that 71% have experienced negative performance since the beginning of the crisis, February 28, until March 16. Only a quarter of the funds registered positive returns that can be considered significant during this period, with a median negative return of 1.19%.
Among the asset managers with the worst results during the period are Vista Capital, Mar Asset Management, Kapitalo, and Ibiuna . Contacted by NeoFeed , Vista Capital and Kapitalo stated they would not comment, while the other asset managers did not respond.
Another study, by Bradesco Asset, shows that the multi-market fund industry recorded the second worst drawdown (percentage reduction between the maximum and minimum peak) in its history: a loss of 4.06% in just two weeks, between March 6 and 13. This result is surpassed only by the first four weeks of the Covid pandemic, between February 28 and March 20, 2020, when the drop was 10.42%.
The segment's performance, measured by Anbima's Hedge Fund Index, reinforces the impact: the week the war began had the fourth worst return in the historical series, behind only the first two weeks of the pandemic (between March 13 and 20, 2021) and the week marked by the release of the audios that compromised the Temer government, on May 19, 2017.
“It was a really big drawdown . We weren’t expecting it. And that led us to analyze what happened,” says Guilherme Anversa, portfolio manager in the investment solutions area at Bradesco, to NeoFeed .
According to him, there was a market consensus around the so-called " Brazil kit ," with bets on falling interest rates and rising stock markets, driven by the influx of foreign investors seeking diversification outside the United States. The movement also included positions on falling interest rates worldwide, including in the US, accompanied by a devaluation of the dollar .
With the outbreak of war and the oil supply shock, the scenario changed rapidly. Expected inflation increased, future interest rate curves rose, and the dollar appreciated. To make matters worse, even precious metals, which had been on an upward trajectory, began to fall, with investors taking profits.
For Marcelo Mello, CEO of SulAmérica, the episode made evident the degree of optimism – and positioning – in local interest rates. “There’s nothing abnormal about this behavior, given that a large part of the industry uses the future interest rate curve as its natural habitat and concentrates its risk budget there. Unfortunately, most were caught over-positioned, and many ended up stopped out , giving back the excellent gains accumulated during the year,” he states.
Who lost the most and who managed to weather the storm?
Asset allocators interviewed by NeoFeed highlighted that there were leveraged positions in interest rates, which helped explain the speed and intensity of the fall. Some managers were also positioned on the drop in oil prices. The result was a series of losses that, in some cases, exceeded 10% in the month.
Vista Capital, which manages R$1.4 billion in assets according to Anbima, saw its multi-market fund accumulate a 14.7% drop, leading the negative ranking of Elos Ayta. A letter from the manager regarding February showed that the rise in oil prices negatively impacted significant short positions in Petrobras shares in the portfolio.
The fund manager states in its letter that the decision is based on the company's high sensitivity to the commodity cycle. The argument maintains that, given the current level of financial breakeven , Petrobras has one of the most leveraged operations to oil price fluctuations among global producers.
"At this time of upward pressure on prices due to geopolitical factors, the market's perception of the stock remains positive. However, our expectation remains in a bearish scenario for oil, which would expose the fragility of this capital structure and the company's real leverage," says an excerpt from the letter.
This positioning is not new. According to Alexandre Alvarenga, investment fund analyst at Empiricus Research, Vista Capital is known for a more aggressive stance. "The fund has a much higher volatility, reaching 25%, 30% per year, while most multi-market funds operate between 8% and 10%, although in recent years it has run below that," he states.
A similar stance was adopted by other fund managers who also recorded significant declines. Kapitalo, for example, was positioned on the fall in oil prices. Its Zeta multi-market fund fell 11%, according to the survey.
Like much of the industry, Kapitalo was also betting on falling interest rates in Brazil and abroad. According to allocators consulted by NeoFeed , the asset manager has already closed out its oil positions.
Meanwhile, Mar Asset, whose Mar Absoluto fund fell 13% – the second worst performance in the industry – was heavily positioned in the Brazilian interest rate futures curve, anticipating a decline. The same occurred with Ibiuna, which held positions in local and international interest rates, causing the Ibiuna Hedge fund to fall 9.2%.
Among the large macro multi-market asset managers, JGP managed to weather the period with greater resilience. One of André Jakurski's funds, the JGP Max Seleção, registered a 0.21% increase in the first half of March and has accumulated a 2.7% gain for the year. Allocators point out that the asset manager has been adopting a contrarian position in the DI market since the beginning of the year, assessing that the interest rate cut cycle would be short.
"There's also the characteristic of the asset manager, who tends to adopt more tactical trades in times of greater risk and uncertainty," says a source, who asked not to be identified.
Verde, owned by Luis Stuhlberger, also managed to contain the damage. According to asset allocators interviewed for this report, the firm maintained a hedge position linked to rising US inflation, which worked well with the change in the economic scenario.
What to expect now?
Large investors consulted by NeoFeed unanimously agree that the sharp downturn suffered by the multi-asset industry will make it difficult to deliver attractive returns to investors in the coming months.
The episode thwarted the recovery that had been underway. In January, net inflows into multi-market funds totaled R$ 17.3 billion, the best result since June 2021, according to data from Anbima.
“Multi-market funds were recovering in intensive care and about to go to a regular room. Now, they have suffered a significant setback. It was a drawdown disproportionate to the market movement. We may see redemptions accelerate again,” says the portfolio manager of a large family office, who asked not to be identified.
Allocators point out that the most intense movement came from the macro multi-market class, which reinforces the importance of diversifying within the category itself, with strategies less dependent on macroeconomic direction, such as long & short. These approaches helped to cushion some of the losses and demonstrated their relevance in portfolio composition.
For Marcos Macedo, head of allocation at Faros MFO, more than invalidating the industry's recent recovery, the episode repositions the debate on diversification.
“In times of stress, when correlations increase, the combination of strategies becomes as relevant as the individual choice of managers. Consistency of performance depends less on the predictability of the scenario and more on the ability to adapt, risk management, and efficient portfolio construction,” he says.
The general recommendation among professional investors is to avoid redemptions at this time, as this would mean crystallizing significant losses. In a study, Bradesco Asset highlights that, historically, immediately after large drops, managers tend to present returns well above the CDI (Brazilian interbank deposit rate).
“We maintained our recommendation for exposure to the asset class, with an average allocation between 10% and 20%, depending on the family's profile, and we consider it important to maintain this,” says Gustavo Falconi, founding partner and head of funds at Arton Advisors.
At the same time, the consensus is that now is not the time to increase positions. The assessment is that interest rates should remain high for longer, as long as geopolitical risk and the reverse flow do not compensate for the risk-return of an allocation above neutral.
“This is not a time for panic, but a time to stay close to management to understand what measures are being taken to address the situation. At this moment, our recommendation is to observe closely,” says Anversa, from Bradesco.
