Brazil Equities Flow of Funds No end in sight

Research evidence excerpt

Brazil Equities Flow of Funds No end in sight

J P M O R G A N Global Markets Strategy

11 June 2026

Brazil Equities Flow of Funds

No end in sight

May registered the largest monthly outflow since March 2020 (BRL 14.9bn), and Co-head of Emerging Markets Equity

the move is extending into June, with an additional USD 1.8bn of net outflows Strategy and Head of LatAm and

through June 8. Redemptions since mid-April correspond to 50% of the total yearly Brazil Strategy

inflow. In comparison, the redemption of EM flows from the peak is about 20%. Emy Shayo Cherman AC

Despite the recent reversal of flows, these stand at R$34.2 billion (US$6.6bn) (55-11) 4950-6684

YTD, which is the second strongest reading in history for the period. Since April emy.shayo@jpmorgan.com

15, there have been outflows on every single day, with the exception of 3 days. Cinthya M Mizuguchi

Rarely has this negative streak been observed, the notable exception being 2008. (55-11) 4950-6560

cinthya.mizuguchi@jpmorgan.com

At this point, it is difficult to know if there will be a flow reversal. Banco J.P. Morgan S.A.

Several factors help explain the outflows since mid April: (1) the end of dollar

weakness and the spike in US Treasury yields marks a backdrop that is less

supportive for risk assets; (2) the AI/tech trade has come back with force and shows

few signs of fading, concentrating flows in tech‑heavy markets (US, Korea,

Taiwan) and leaving commodity‑linked and externally exposed markets like Brazil

relatively less favored; (3) the easing cycle is likely to be shallower than previously

expected and policy rates staying higher for longer; (4) latest polls have been

showing President Lula with an advantage of about 6% over Flavio Bolsonaro in

an eventua second round, an impediment for asset price rises.