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The volatility brought about by the coronavirus has led multimarket fund managers to change their strategies. Houses consulted by CNN Brasil Business reinforced mechanisms to protect the portfolio, expanding exposure to safe assets such as dollars and gold, and also bet more on shares of good dividend payers and assets abroad, for example.
With the significant drop in interest rates in recent years, which brought down the profitability of investments with guaranteed gains, investor demand for this product has grown, which mixes elements of fixed and variable income.
Multimarkets are funds in which managers are free to invest in various types of assets, from Treasury bonds to stocks, derivatives, commodities and currencies. They can bet on both the high (trade long, market jargon) and the low (trade short) of these assets.
The number of accounts in these funds increased more than five times from the end of 2016, when the Central Bank began to reduce the Selic rate, until the end of last year, from 496.4 thousand to 2.58 million. The number did not stop increasing until the arrival of the coronavirus crisis: it reached 2.94 million in February, but fell to 2.84 million in March this year, according to the latest data from the Brazilian Association of Financial and Capital Market Entities (Anbima).
Equity, that is, the amount of money invested in them, went through the same movement. The values went from R $ 670 million at the end of 2016 to R $ 1.18 billion at the end of last year. In February 2020, resources reached R $ 1.25 billion, but fell to R $ 1.19 billion in March and then to R $ 1.18 billion in April.
Multimarkets have different categories, defined in regulations, and, consequently, different volatilities. In general, they are considered more risky than fixed income funds and less daring than equity funds.
Defensive portfolios gain time
Damont Carvalho, manager of macro funds at Claritas, points out that the secret for a multimarket to pass profitably through crises is to always have a balanced portfolio with hedges (protections). He manages about R $ 4 billion of the R $ 9 billion invested in the manager.
“Hedge is like insurance. We buy not to use it, but when we need it, we are happy to have it”, he says. For him, in times of uncertainty and rising and falling in the markets, as now, clear and direct communication about losses and strategies is the greatest ally of managers.
“When there is a lot of volatility, what the client wants is the truth. There is no manager who gets it right every day, but there is one who is the most investor partner,” he says.
On the other hand, Carvalho defends that those who apply must have a long-term vision. “When we invest in a management company, it is like a marriage: you cannot separate in any crisis,” he says.
He says that since the crisis began to take shape, he has prepared his portfolio for a scenario of low global growth. For example, it bet on the dollar against currencies of emerging countries and made short positions at interest rates not only from Brazil, but from all over the world, waiting for cuts.
“I started to buy defensive stocks, such as from companies that benefit from lower interest rates and are good dividend payers. With lower interest rates, dividends are becoming increasingly important in the portfolio,” he says. Among these roles, cites those of companies in the electricity and sanitation sector.
He also made put options for drops of 5% to 10% in the price of some shares. “I was able to earn a lot of money in interest, currencies and stock market protection,” he says.
At the house, the Claritas Institucional multimarket, which is of low volatility, accumulates a return of 7.09% in the last 12 months until May 18, or 136% of the CDI. In the year, the return was 2.44% (170% of the CDI) and, in April, it was 0.64% (226% of the CDI). The fund has an equity of around R $ 1 billion.
Total Return, the broker’s high volatility fund, has a return of 19.6% (377% of CDI) in the last 12 months, and 5.71% in the year (398% of CDI). In April, it was 2.45% (860% of the CDI). The fund has an equity of approximately R $ 200 million.
Another one preparing a defensive portfolio to overcome the coronavirus crisis, Carlos Menezes, a partner at Gauss Capital, says he migrated “a good part of the bets” from the Gauss Master Multimercados fund, one of the house’s flagships, to the external scenario and reduced the local exhibition.
Gauss Master Multimercado has a net worth of approximately R $ 450 million and accumulates a return of 12.05% in the last 12 months until May 18, equivalent to 230% of the CDI. In 2020, the return is 1.57% (569% of the CDI) and, last month, it was 7.53% (2,640% of the CDI).
Patrick O’Grady, CEO of the digital management company Vitreo, says that, since the beginning of the turbulence, the company’s team has intensified the protection of the portfolio by increasing exposure to dollar and gold, in addition to a hedge in the future Ibovespa.
“We also made some changes to the stock book, favoring high quality companies, with a solid financial position”, he says. The manager also invested 1% of the portfolio in cryptocurrencies, in order to diversify.
One of the manager’s multimarket funds, Carteira Universa has a net worth of around R $ 1.2 billion. It has accumulated a return of 0.77% since it was launched, in June last year, until last Friday (15). It is the equivalent to -0.77% of the CDI for the period. This year, the return is -12.82% (-897% of the CDI). In April, the fund yielded 5.86% (2,056% of the CDI).
What to analyze before investing
Before investing in a multimarket fund, it is necessary to evaluate a series of variables. These funds have an administration fee and the income is deducted from the Income Tax at the time of redemption. In addition, they are also under the system of “quota-quotas”, which is an anticipation of the payment of income tax: every six months, the value of the investor’s share is reduced between 20% to 15% (depending on the term of the investment) .
Financial planner and professor at Fundação Getulio Vargas Myrian Lund recalls that it is a product that does not guarantee gains. It is valid to diversify the portfolio, but it should not concentrate most of the investor’s money.
“Their portfolio is usually fixed income, with leverage in derivatives, which are high risk markets. When you invest in these funds, you sign a term assuming that you can lose all your equity and still have to enter more money. happened because managers limit the loss rate, but it is a risk “, he says.
For her, the recommendation is not to place more than 30% of the resources in the multimarkets. And keep an eye on profitability.
“I would say, due to the risk they offer, that it is necessary to seek a return of at least 200% of the CDI. Otherwise, it is preferable to invest in fixed income, as in the IPCA + Treasury or in incentive debentures that pay up to 130% of the CDI free of IR . ”
To decide whether or not to bet on a particular fund, Myrian recommends asking for a monthly profitability report and comparing whether or not the product is distanced from the CDI, in addition to studying the manager’s history.
“Past profitability does not guarantee a future, but it is a north.”
Source: CNN Brasil.