Brazil Hedge Funds
Hedge Funds in Brazil Invest in Bonds, Beat Out U.S. Funds
The irony is that trading strategies by most Brazilian hedge funds are similar to those of indexed mutual funds. Brazilian managers put almost all of their money into bonds and stocks. Brazilian regulators call hedge funds multimercado, or multistrategy, firms to differentiate them from mutual funds.
Unlike the unregulated pools of capital in the U.S., hedge funds in Brazil report their asset values daily to regulators. They also have to disclose their holdings and typically must be able to meet redemptions within days of when investors ask for their money, inhibiting them from making many risky bets.
That means Brazilian hedge funds are relatively easy to manage, says Simon Nocera, co-founder of San Francisco-based hedge fund Lumen Advisors LLC and a former economist at the International Monetary Fund.
“All you have to do is buy the Bovespa stock index and government bonds,” he says. “It’s not like you have to be superactive or a great trader.”