Latam Equity Quant: A new plot in the 2026 LatAm movie

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Latam Equity Quant: A new plot in the 2026 LatAm movie

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Latam Equity Quant

A new plot in the 2026 LatAm movie

Investment Strategy

Key takeaways 15 May 2026

Investment Strategy• Brazil continues to underperform global markets with foreign outflows and higher

Latin America political noise.

• Weaker EM (ex‑China) flows have also weighed on LatAm performance recently.

• Brazil equity fund outflows are more limited compared with 1Q26.

This week in numbers

LatAm underperformed global markets again this week. The Ibovespa -5%, while

Mexico -1%, versus S&P 500 +1.5% and EM down 1% in USD total return terms. LatAm

outperformed earlier in the year on strong EM inflows. More recently, unresolved

David Beker >>

geopolitical tensions around Iran have coincided with a shift in investor interest toward Bz Econ/FI & LatAm EQ Strategy

tech and AI themes. In addition, political noise picked up across in LatAm, with Brazil, Merrill Lynch (Brazil) +55 11 2188 4371

Peru, and Colombia heading toward presidential elections. david.beker@bofa.com

Paula Andrea Soto, CFA >>

Our quantitative screen of “Brazilian Magnificent 7” stocks, (MercadoLibre, Nubank, LatAm Equity Strategist

WEG, BTG Pactual, Raia Drogasil, Localiza, and Itaú), which has a growth bias, is -6% this Merrill+55 11Lynch2188 (Brazil)4226

week. Our “Unforgettable 7” screening (Petrobras, Vale, JBS, Banco do Brasil, Ambev, paula.soto@bofa.com

Bradesco, Gerdau), which has a value bias, is -5% this week. Carlos Peyrelongue >>

Mex Eq Strat/Research Analyst

Flows into global funds dedicated to Brazil and LatAm remain positive (Exhibit Merrill+52 55Lynch5201 (Mexico)3276

19) but weaker flows into GEM funds weighs on LatAm underperformance over the past carlos.peyrelongue@bofa.com

weeks (Exhibit 2).