Full Breakdown
Rajiv Jain Urges Investors to See Opportunity in Brazil After Lula’s Surprise Win
By Drooid · · How we work
Market Selloff Following Lula’s Re-Election
Brazilian equities plunged after Luiz Inácio Lula da Silva’s unexpected second-term victory, with the Ibovespa dropping as much as 17% and triggering its first circuit-breaker since 2020. The Real recorded its steepest decline in more than two decades, while the benchmark index settled about 0.7% lower the following morning. The rout reflected investors’ heavy bets on right-wing candidate Flávio Bolsonaro, whose earlier lead had raised expectations of tighter fiscal policy.
GQG Partners’ Position and Rationale
Rajiv Jain, co-founder of GQG Partners and manager of roughly $150 billion in assets, said the selloff presents a buying chance. GQG’s emerging-markets equity fund has returned less than 2% this year, lagging a 14% benchmark gain, yet Brazil still accounts for 14% of the fund’s $18 billion portfolio—about 10 percentage points above the benchmark weighting. Jain highlighted the firm’s 2022 decision to become the largest private shareholder in Petrobras, a bet that later yielded more than 285% in dollar returns, outpacing major U.S. tech firms.
Data & Statistics
- Ibovespa fall: up to 17% intraday, first circuit-breaker since 2020.
- Real depreciation: steepest drop in over 20 years.
- GQG Emerging-Markets fund: <2% YTD return vs. 14% benchmark.
- Petrobras shareholder stake: GQG’s largest private holding, delivering >285% return since 2022.
Official Statements & Responses
Jain also said the government’s need to curb the budget deficit remains vital for lowering borrowing costs, but he believes market-friendly reforms are still possible under the new administration.
Verbatim Quotes
- “People always have that fear, but the checks and balances are still reasonably good,” — Rajiv Jain — Rajiv Jain, co-founder of GQG Partners.