Bank of America’s latest equity strategy report finds that Latin America is continuing to outpace global markets year-to-date, even as foreign investment flows into the region eased in March.
The report shows that inflows to emerging market funds excluding China fell sharply, dropping to $1 billion in March from $37 billion in February. However, the report notes a pickup in flows during the first week of April.
Brazil experienced a distinct pattern in March, where overall foreign inflows slowed largely because of outflows in the futures market. On the cash equities side, the report highlights that foreign investors purchased 4 billion reais on the B3 exchange in March. That activity reflected 11 billion reais of cash inflows that were offset by 7 billion reais of futures outflows.
Within Brazilian cash equities, foreign money flowed most strongly into the energy and utilities sectors, while the healthcare and consumer discretionary sectors recorded the heaviest selling by foreign investors.
The day after the April 9 ceasefire announcement stands out in the report as the largest single-day foreign inflow into Brazilian cash equities since 2010, underscoring episodic spikes in demand tied to specific events.
Local fund flows in Brazil also shifted in March. Domestic equity funds saw 4 billion reais in outflows during the month, an improvement versus the 7 billion reais that left in February. Multimarket hedge funds recorded 1 billion reais of outflows in March, down from 9 billion reais in February.
Conversely, local funds focused on corporate credit attracted substantial new money, registering 22 billion reais of inflows in March and reaching 50 billion reais year-to-date. The report notes that corporate credit funds had posted 130 billion reais in inflows in 2025.
Beyond Brazil, the report documents a policy development in Colombia. The government has issued a decree that sets a cap on foreign investment by pension funds at 30% of total assets. Pension managers are required to submit plans to adjust their allocations within six months. A transition regime allows a preliminary cap of 35% within three years, with a gradual move to the final 30% limit within five years.
Context and implications
The report presents a picture of resilient regional performance amid volatile cross-border flows, with clear distinctions between cash equity demand and futures positioning in Brazil and a notable regulatory move affecting Colombian pension allocations.