SAO PAULO, March 9 (Reuters) - Assets under management by Brazilian wealth managers increased by a fifth last year as financial markets rallied, industry regulator Anbima said on Thursday, a sign of increased investor confidence in Latin America’s largest economy.
Assets under management rose 20.7 percent to 90.1 billion reais ($28.3 billion) in 2016, at a time when Brazil’s benchmark CDI interbank rate averaged 14 percent.
Fixed-income products accounted for nearly half of all investments, slightly above the year before.
Brazilian interest rates rank among the world’s highest, boosting the allure of government bonds as the country’s deepest recession ever weighed on corporate profits over the last three years.
Still, equity investments rose as a share of total assets for the first time since at least 2014, tracking a historical rally in Brazilian stocks and the first rate-cutting cycle in four years.
Brazil’s benchmark Bovespa stock index jumped 38.9 percent in 2016, boosted by hopes that center-right President Michel Temer would curb public spending following the ouster of his leftist predecessor Dilma Rousseff.
In a conference call, Anbima director Ricardo Ziliotto said he expects positive trends to continue in the coming year as Temer advances structural reforms and interest rates continue to fall.
“The industry is moderately optimistic, as we can tell not only by the figures but also by meeting with clients,” he said.
Equities and cross-asset funds, which can invest in a diverse range of products, are likely to benefit the most from the rebound, Ziliotto added.
Reuters has reported major cross-asset funds have closed off to new entrants in face of surging demand, while others have opened new vehicles to capitalize on the trend. ($1 = 3.1797 reais) (Reporting by Bruno Federowski; Editing by Tom Brown)