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Investing.com - Brazil’s equity market outflows are showing signs of slowing, with last week recording only R$0.3 billion in outflows from Brazilian equity funds, the lowest weekly outflow since November 2024, according to Bank of America’s latest report.
The Ibovespa index declined 0.5% last week, slightly underperforming compared to emerging markets (+1%) and the S&P 500 (+0.6%) in USD total returns. Despite recent underperformance, investor conviction on the Ibovespa remains strong, with 83% of survey participants expecting the index to exceed 140,000 points, while cash levels declined to 6.2% from 7.8% in May.
Brazilian equity fund outflows have been moderating, averaging R$1.2 billion per week in the second quarter of 2025, compared to R$2 billion per week in the first quarter. Foreign investors maintained muted flows to B3 in June, primarily purchasing Energy, Materials, and Utilities sectors, while local funds were net sellers across most sectors.
Bank of America’s MSCI preview indicates Porto Seguro (BVMF:PSSA3) could be added to the Brazil standard index in the upcoming review, scheduled for announcement on August 7, 2025, and effective August 27. Copel (BVMF:CPLE3) is approaching the threshold for addition, followed by Stone (NASDAQ:STNE), while Natura (BVMF:NATU3) could potentially be removed if Stone is added.
For the Ibovespa index, whose next official preview will be announced by B3 on August 1 with changes effective September 1, Bank of America estimates Cury (BVMF:CURY3) as the most likely addition, while Petz (BVMF:PETZ3) and Sao Martinho (BVMF:SMTO3) are the most likely deletions from the index.
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