The "threat" of Jair Bolsonaro surprises the venerable manager of Brazil

The exaggerated influence of politics on the Brazilian markets it's surprising even for the veteran fund manager Luis Stuhlberger.

"It was always reasonable to expect some volatility in reform negotiations", said Stuhlberger, of Green badet management, in a comment to customers. "The big surprise was to see that the president himself was a great threat to promoting the reform of his own administration."

Brazilian business confidence drops due to great uncertainty

President's shocks Jair Bolsonaro with key allies raised uncertainties about the government's ability to conduct an ambitious reform agenda, starting with a review of the country's pension system.

The worry affected Brazilian badets in March: Ibovespa's benchmark fell for the second consecutive month and the Brazilian currency lost what it has gained since the beginning of the year. l & # 39; year. The Verde Flagship Fund underperformed, at 0.42% in March, less than 0.47% of the interbank rate known as DI, the benchmark of the fund.

Bad economic situation exposes Brazil's problems

Although he says that reason will prevail in the end, Stuhlberger is preparing for new waves of volatility and the market opportunities that they can bring. Since mid-March, Verde has maintained small "structural positions", mainly equities, continuing to capitalize on Brazilian equities and reduced exposure to US stock markets.

Stuhlberger has become one of Brazil's most respected hedge fund managers after his fund has generated a total return of more than 16,000% since its inception 20 years ago. So far this year, the fund has outperformed the benchmark by almost 3 percentage points.