MACROECONOMIC FACTORS, FUND INDICATORS, AND MANAGEMENT TYPE: What influences the net raising of investment funds in Brazil

Abstract

This study aimed to understand the net funding of three main classes of investment funds in the Brazilian market, equity (majority investment in variable income), multimarket (involves several risk factors, without the commitment to concentrate on a given factor), and fixed income (predominant investment in fixed income), from the perspective of differences between exclusive funds for qualified or professional investors and non-exclusive funds, as well as between funds managed by the five largest banks in the country and funds managed by other companies. Thus, this research provided unreported evidence on the net inflow of investment fund classes in the Brazilian market, one of the largest in the world. Previous studies focused, as a rule, on only one fund class, predominantly stocks. In addition to analyzing three of the most important classes of funds, the research considered important aspects of the Brazilian market: investor exclusivity and fund management by the country's largest banks. Tests were performed aggregated at the class level, by vector autoregressive (VAR), and at the fund level, via multiple regressions with panel data, overcoming the limitations of VAR models, using quarterly data from 2001 to 2019. In short, in the medium term, qualified or professional investors are less sensitive to returns and consider more macroeconomic information to make their investment decisions in funds, a behavior similar to that of investors in equity funds not managed by the five largest banks in the country. It was also evident that funds with greater assets raised less proportionally, and those with higher previous returns raised more.