Brazilian small caps and investment funds hit historic lows

Brazilian investment funds and small cap stocks experienced historic losses following the second round of elections. On October 26, 6,756 funds recorded their lowest daily return in their entire history, according to data from Comdinheiro/Nelogica. This movement included 84% of equity funds, which saw a median daily return of -15.78%.

The small cap index (SMLL) recorded its largest weekly decline ever, falling 32.79%. This drop surpassed the previous record set during the 2008 global financial crisis, when the index fell 23.41% following the Lehman Brothers collapse. Analysts indicate that, unlike previous market stresses driven by global crises, this volatility was primarily triggered by domestic political and economic reactions to the election results.