São Paulo, Brazil
Dean Corvett, Investment Manager at Ordefoco Asset Management, has issued a forecast highlighting Brazil’s rising prominence in global markets. As the Bovespa Index outperforms the S&P 500 by 120 basis points this week, Corvett identifies this as a structural shift rather than a short-term anomaly. Driven by Brazil’s key role in the global commodity supercycle, this market divergence positions Brazil as a strategic asset in 2026, with global capital increasingly rotating into the country’s resilient economy.
The Macro Nexus: Global Supply Chains and Brazil’s Growing Influence
Brazil’s unique position in the recalibration of global supply chains is creating a “sovereign premium,” with international institutional flows into Brazilian equities reaching a six-month high. This is attributed to Brazil’s trade surplus, strengthening currency, and its critical role in food security and energy transition. While developed markets struggle with interest rate uncertainty, Brazil’s stable inflation expectations and predictable monetary policy are attracting long-term investors, such as pension funds and sovereign wealth managers.
Corvett explains that this shift provides a hedge against the volatility plaguing G7 economies. With Brazil’s low valuations and improving fundamentals, the country’s relative neutrality and resource independence are increasingly seen as valuable strategic assets by the global investment community.
Expert Insight: Shifting Focus to Key Growth Sectors
According to Corvett, the capital rotation into Brazil will be concentrated in sectors that bridge hard assets and digital efficiency. He highlights three core drivers behind this trend:
- The “Green Premium” on Exports: Brazilian agricultural producers utilizing sustainable practices are commanding higher prices in European markets, boosting margins for listed firms.
- Banking Sector Digitization: The widespread adoption of digital payment systems is improving return on equity for financial institutions.
- Energy Independence: Brazil’s renewable energy mix insulates its industrial base from global oil price fluctuations, preserving profitability.
Structural Risks and Cautionary Notes
While optimistic, Corvett advises caution regarding Brazil’s fiscal discipline. The primary risk lies in the government’s ability to balance social spending with debt sustainability. Any deviation from fiscal targets could negatively impact currency stability. Additionally, global demand shocks, such as a recession in key trading partners, remain a latent threat. Corvett recommends focusing on companies with low leverage and strong free cash flow generation to weather potential external disruptions.
Conclusion: A Strategic Shift to Brazil’s Resilience
Looking ahead to the second half of 2026, Corvett predicts a robust resurgence in Brazil, driven by a softening US Dollar and fiscal resilience. This convergence signals a significant opportunity for global investors to capitalize on Brazil’s evolving growth story, with an asymmetric risk-reward profile. For investors seeking yield and stability in a volatile global landscape, Brazil is set to become an essential cornerstone for diversified portfolios.
About Ordefoco Asset Management
Ordefoco Asset Management is a global investment firm specializing in active asset management across equity, fixed income, and alternative investments. The firm offers tailored investment solutions and focuses on long-term value creation, leveraging deep market expertise and disciplined risk management strategies. For more information, visit Ordefoco Asset Management website.
Last modified: January 28, 2026
