Ibovespa does not operate on holiday and Wall Street closes lower

On B3 closed day, highlight wall street exchanges, which closed lower on Tuesday (12), with investors awaiting the balance sheet season of the third quarter.

On the agenda of the day, highlight the release of the minutes of Fomc in the USA. The market will be aware of the information at this meeting to find out what the Fed's next decisions will be regarding the reduction of purchases of American treasuries, the so-called tapering.

At its last meeting on September 22, the Fed signaled that tapering could come at the next meeting, scheduled to take place on November 3. Also abroad, investors follow the disclosure of the Consumer Inflation Index (CPI).

In Brazil,a day of relatively empty economic agenda.

IMF estimates strong rise for inflation in Brazil in 2021

The International Monetary Fund significantly raised projections for the Broad Consumer Price Index (IPCA), the country's official inflation, and went on to estimate a rise from 4.5 percent to 7.9 percent this year. For 2022, the Fund rose from 3.5 percent to 4.0 percent.

The government's central target for inflation is 3.75 percent in 2021 and 3.50 percent for 2022. With this, the IMF projection exceeds the ceiling of the official inflation target this year, but for 2022 it is within the margin of tolerance of the Central Bank (BC).

Do you already invest in funds?

Step by step to analyze and choose the Fund that best suits your goal

Investment funds are a modality that has been attracting more and more investors in Brazil in recent years.

Last week, our fund specialist, Luiz Felippo,even participated as a special guest of Stock Pickers, for the podcast, commenting on what most important the investor needs to know to choose a fund.

We have prepared a condensed version of the written interview with a hint of exclusivity to the subscribers of our news. Check it out below.

There are more than 40,000 funds available. You can find Equity Funds, Fixed Income, Multimarket, Currency, Commodity, among others. But how to know what you should look for?

This question is important for the investor, because a study by Luiz revealed a dark side of this industry and that is little commented so far. For example, the mortality rate of multimarket funds reaches 65 percent.

Now let's go to practice.

When choosing a fund, start with quantitative analysis.

  1. Sharpe

    Basically, most investors look at the Fund's profitability in the last 12 months and it's more money, only it's not like that.

    Sharpe is an interesting indicator for analyzing Multimarket Funds because it shows how much the manager can convert from risk to return.

That is, the higher the Return of the Fund and the lower the risk, the better the Sharpe Index will be because it is calculated on top of the return less risk-free rate divided by volatility.

  1. History

    The performance history is another information relevant to investors. Although past profitability is not a guarantee of future return, analyze the return (above cdi) and prefer Multimarket Funds with at least 36 months. For Stock Funds, the minimum period is 5 years.

If it is an exception, that is, funds that do not yet have a history, make a smaller allocation so as not to jeopardize your equity.

When looking at the performance history, also note how much the manager has earned and how consistency was in generating return to the quota holders.

  • Heritage

    Speaking of him…The fund's equity is formed by the sum of the quota holders' money.

    Here, it is worth analyzing two important points:

  • 1) First, if the annual cost structure (essentially, of the Fund team) is paid for by the level of assets managed throughout history.

    This study applies to all types of Funds, especially for new funds in the market, where the manager needs to "prove themselves" and depends on the money of the administration to remunerate the team.

2) Second, please note whether the strategy matches the size of the Fund's equity.

In other words, understand whether the strategy that the manager executes is compatible with the size of the equity.

You can also apply this study to any type of Fund, especially those that are expanding (growth).

Having won the previous stages, the time has come to leave for qualitative analysis.

  1. Team

    To manage investment funds, a strategic team is essential. Search for information about the manager and your team's resume and track record. What are the names behind the management?
  2. Governance

    Understanding how governance works can indicate whether the Fund will survive in the market or not. This is because there can be several problems, such as conflicts of interest.

Seek information if the Fund manager can ensure that the person who is generating the most performance is being paid adequately or is able to have corporate mobility and be recognized in accordance with the meritocracy policy.

Why is that important?Imagine a manager who is responsible for most of the Fund's profitability, but is not adequately remunerated by the manager. What's the first instinct? Pack your bags and leave? Probably.

There are examples of Assets that were extinguished because the "big star" left the company.

  • Manager

    Finally, know who the manager is. This point can be the biggest challenge for the individual because the Fund manager or co-manager can leave without you being aware.

Even when the professional remains in management, from the beginning, for example, is he focused on making his money yield?

At Nord Fundos, we go through this through this step by step to know which investments will deliver results in the long term, and have easy access to managers to understand their strategies and what make them the best in the market. You can get great returns with Funds – just delegate to the best experts the management of your money.

LEGAL INFORMATION This publication aims solely and exclusively to encourage the discussion of the topics presented and to disseminate the activities of Nord Research, and should not under any circumstances be understood as an offer
to trade securities, securities or investment products of any kind.
The redistribution of this content is authorized, provided that the source is mentioned.
Certain content produced by the Nord Research team may constitute "Analysis Report" as defined in Art. 1 § 1 of CVM Resolution No. 20/2021. Where appropriate, the securities analyst(s) author of the respective content(s) declares that any securities recommendations presented constitute personal opinions, elaborated in a totally independent and autonomous manner – including with respect to Nord Research. Under such circumstances, the respective analyst(s) of the content(s) declares itself responsible for compliance with the provisions of Art. 20 of the same CVM Resolution.

Last week, we commented on TAG Investing released here on the Panorama Offshore portal. Today, we present tips from Nord Fundos de Investimentos, with expertise from Luiz Felippo.

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