Key insights
- Bank of America reports resilient foreign inflows into Latin America, though inflows slowed in March. Brazil saw significant inflows into cash equities in April, particularly in energy and utilities. Colombia capped foreign investment by pension funds, potentially reducing future inflows. Limited direct impact on US equities, but could signal broader risk appetite shifts.
Bank of America sees resilient foreign inflows to Latin America
Investing.com -- Latin America continues to outperform global markets year-to-date, according to Bank of America's latest equity strategy report, though foreign inflows into the region slowed in March.
Inflows into emerging markets excluding China funds decreased to $1 billion in March from $37 billion in February, but picked up again in the first week of April. Foreign inflows into Brazil also slowed in March, primarily due to outflows from futures markets.
The day after a ceasefire announcement on April 9 marked the largest daily inflow from foreigners into Brazilian cash equities since 2010, Bank of America reported.
In March, foreign investors bought 4 billion reais on the B3 exchange, with cash inflows of 11 billion reais offsetting futures outflows of 7 billion reais. Within cash equities, foreign investors directed major inflows into energy and utilities sectors, while healthcare and consumer discretionary sectors saw the most selling activity.
Brazilian local equity funds experienced 4 billion reais in outflows during March, compared to 7 billion reais in February. Multimarket hedge funds had 1 billion reais in outflows in March, down from 9 billion reais in February.
Local funds in Brazil dedicated to corporate credit posted 22 billion reais in inflows during March, reaching 50 billion reais year-to-date, following 130 billion reais in 2025.
Colombia's government issued a decree establishing a cap on foreign investment by pension funds at 30% of total assets. The pension funds must submit adjustment plans within six months, with a transition regime allowing a preliminary cap of 35% within three years before converging to the final 30% limit within five years.