Brazil’s investment fund industry ended the first half of 2025 with net outflows of R$37.8 billion, reversing the positive net inflows of R$190 billion seen in the same period last year. Considering the past five years, only the first half of 2023 saw larger net redemptions, totaling R$124.7 billion.

Multimarket funds led the withdrawals from January to June, with R$78.9 billion in net outflows, similar to the R$80.8 billion withdrawn in the same period of 2024. Equity funds followed, with R$43.6 billion in net redemptions, compared with net inflows of R$8.1 billion a year earlier.

“The industry’s performance in the first half reflects a challenging macroeconomic environment, marked by political and economic uncertainty, and a more cautious stance from investors. They have been more selective in allocating capital to higher-risk assets,” said Pedro Rudge, a director at ANBIMA.

Volatile markets

He noted that flows were highly volatile throughout the first half. Some months, such as February and April, saw heavy outflows—R$24.5 billion and R$52.4 billion, respectively—while others posted positive inflows: R$14.2 billion in January, R$11.7 billion in March, and R$13.6 billion in June. “This behavior suggests investors may be reassessing their strategies in light of a more cautious market environment,” he added.

Going against the trend of other fund classes, fixed-income funds led net inflows in the first half, with R$59.4 billion in new capital. Despite the positive figure, it was significantly below the R$199.6 billion seen in the same period last year. Among the standouts were sovereign short-duration funds, which invest in short-term government bonds, with R$59.8 billion in net inflows, and free-duration, free-credit funds—allowed to allocate over 20% of assets to medium- and high-risk credit instruments in Brazil or abroad—which saw net inflows of R$26.8 billion.

Strong returns

Among the fixed-income category, free-duration, free-credit funds—also among the top performers in terms of inflows—posted the best returns, gaining 7% in the period, outperforming the CDI (Interbank Deposit Certificate) benchmark rate, which rose 6.4%.

In the multimarket segment, neutral long and short funds—which build offsetting long and short positions with a net exposure capped at 5%—delivered the best returns, at 12.6% between January and June.

In the equities category, sector funds—which invest in companies from the same industry—topped the charts with an average return of 35.8%, far outpacing the 15.4% gain in the benchmark Ibovespa stock index.

Transition to Resolution 175

As of July 3, a total of 26,738 funds—representing 82% of the industry—had adapted to Resolution 175, issued by the Securities and Exchange Commission of Brazil (CVM), whose compliance deadline ended on June 30.  This percentage is expected to rise in the coming days. 

According to ANBIMA’s self-regulatory framework, administrators have up to 15 days after a fund is registered with the CVM to report the information to the Association. As a result, nearly 100% of funds are expected to be in compliance by July 15.

“The transition to the new regulation was complex, but the industry rose to the occasion. Now that the core requirements have been met, the expectation is that managers will move into a phase of optimizing fund structures and exploring the flexibilities and innovations introduced by Resolution 175,” said Julya Wellisch, a director at ANBIMA.

Of the funds that have already adapted, 73% chose the limited liability model for shareholders, meaning investors are not liable for losses beyond the capital they invested.

Additionally, 62% declared the ability to invest in foreign assets. CVM’s Resolution 175 allows both retail and qualified investor funds to allocate up to 100% of their assets abroad, provided they meet certain criteria.