Brazilian hedge funds, notched their strongest monthly performance in nearly two decades in April, as falling interest rates fuelled outsized gains with the Anbima Hedge Fund Index surging by 4% over the month, according to a report by Bloomberg.
That performance marked the index’s best return since the its inception in 2007, outpacing the local CDI rate, which rose 1.1%.
The performance marked the first time since November that active hedge fund managers collectively beat their benchmark, driven by bold macro bets on both domestic and global interest rate trajectories.
Heavyweights Absolute Investimentos, Ibiuna Investimentos, and Legacy Capital all delivered returns above 3%, having correctly positioned for a decline in both local swap rates and international yields.
Bahia Asset Management meanwhile, which returned 3.2% through its Marau fund, profited from cross-border rate positioning. The firm continues to back lower U.S. rates while tactically wagering on a steeper Brazilian curve—short real rates near the peak, long further out.
Elsewhere, Kapitalo Investimentos and Vinland Capital remain positioned for further rate rallies in Brazil, while currency plays – especially shorting the US dollar – also contributed to outperformance.
Absolute’s CIO Fabiano Rios highlighted the firm’s preference for European equities and short dollar positions as capital rotates away from U.S. assets. “We still like shorting the dollar very much,” Rios said during a 7 May 7 event.
Absolute Vertex returned 4.4% in April, while Ace Capital (+3.1%) profited from global rate-cut bets amid cooling growth forecasts. Adam Capital (+4.7%) meanwhile, remains hawkish on Brazil, expecting CPI to exceed 6% with no domestic cuts in sight, and Genoa Capital (+3.4%) is expecting Brazil’s central bank to hold unless inflation worsens materially.
Ibiuna (+3.5%) is betting on a weaker dollar versus the euro and yen, alongside broad rate plays in both EM and DM markets, while Kapitalo (+1.7%) added tactical exposure to Mexican rates, trimmed short positions on the yuan and real,
Legacy (+3.2%) is leaning into a bearish dollar thesis amid signs of a US slowdown, and Verde Asset (+1.8%) increased exposure to crypto and gold, while holding a cautious stance on Brazilian and global equities.
