Kapitalo cuts real rate bets, boosts Brazil holdings amid August market gains
Fund manager Kapitalo shifted its Brazilian strategy after achieving significant portfolio returns, increasing exposure to the local currency and reducing interest rate exposures.
Independent fund manager Kapitalo adjusted its asset allocation in early September following strong August performance. The firm reported gains of 3.80% for Fund Kappa and 5.82% for Fund Zeta. Both funds held more than half their annual returns from stock market activity rather than fixed-income assets, yet both ended the year significantly below the CDI benchmark rate at 6.36% and 3.83%. Capitalo simultaneously reduced investments in real and nominal interest rates within Brazil while increasing positions in the Brazilian currency for both funds. The manager also maintained long positions in Brazilian stocks but cut exposure to global equities. Strategic shifts extended outside Brazil, involving a reduction in UK and Eurozone rate holdings alongside increased Canadian dollar exposure. Investments in commodity markets saw a rise in copper positions and a short squeeze on sugar. Short positions in oil and gold were reduced, while all net long positions in corn were eliminated. The firm noted that the Middle East conflict between the United States and Iran lacked near-term resolution prospects.
