Ibovespa for Whom? Why Previ Plans to Offload R$7 Billion in Stocks (and Shift to Fixed Income)
- Why Is Previ Dumping R$7 Billion in Stocks?
- Fixed Income Over Ibovespa: A Contrarian Bet?
- Previ’s 2025 Turnaround: From Red to Black
- Analysts vs. Previ: Who’s Right About the Ibovespa?
- Q&A: Decoding Previ’s Strategy
In a surprising move, Brazil’s largest pension fund, Previ, is divesting R$7 billion in equities—including stakes in BRF and Neoenergia—to pivot toward fixed-income assets like NTN-Bs. This comes despite the Ibovespa’s 19% surge in 2025, fueled by rate-cut expectations. Here’s why Previ sees bonds as the safer bet, even as analysts remain bullish on stocks.
Why Is Previ Dumping R$7 Billion in Stocks?
Previ, the pension fund for Banco do Brasil employees (managing R$267 billion in assets), is slashing its equity exposure by selling positions in 12 companies. President João Fukunaga cited "low returns" as the primary driver, even accounting for dividends. The fund has already offloaded its 30.29% stake in Neoenergia (NEOE3) to Spain’s Iberdrola for R$11.95 billion and trimmed BRF (BRFS3) holdings, netting R$2 billion. The BRF-Marfig merger, which created MBRF, reportedly influenced the decision. "We’re reallocating to NTN-Bs to immunize liabilities," Fukunaga told.
Fixed Income Over Ibovespa: A Contrarian Bet?
While the Ibovespa hits record highs, Previ’s shift underscores a stark divergence in market views. The fund argues that Treasury notes (NTN-Bs) offer more predictable cash flows amid global volatility—like U.S. tariff shocks and uneven GDP growth. "Equities have room to fall," Fukunaga noted. Yet, Ativa Investimentos maintains a 148,000-point target for the Ibovespa, citing domestic rate cuts and electoral shifts as tailwinds.
Previ’s 2025 Turnaround: From Red to Black
After a rocky start, Previ’s Plan 1 rebounded with a R$1 billion surplus this year, posting an 8.97% return through August. "This validates our March outlook," Fukunaga said. The fund’s fixed-income pivot aligns with its liability-matching strategy, though some equity sales remain undisclosed.
Analysts vs. Previ: Who’s Right About the Ibovespa?
Ativa’s team sees further upside: "Brazilian rates may have peaked, and Fed cuts could boost emerging markets." But Previ’s retreat raises questions—is this prudence or missed opportunity? One thing’s clear: 2025’s market drama is far from over.
Q&A: Decoding Previ’s Strategy
Why is Previ selling stocks now?
Previ cites underperformance in equities versus fixed income, especially NTN-Bs, which better match its long-term obligations.
Which stocks are being sold?
Confirmed sales include BRF and Neoenergia. The other 10 holdings remain confidential pending transactions.
Could Previ’s move signal a market top?
Not necessarily. While contrarian, Previ’s focus is liability management, not timing the market.
