Bank of America Recommends Investing in Brazil and Argentina

The share of investors with a neutral view on Argentine asset prices dropped significantly—from nearly 20% in May to under 10% now.

Written by: Ignacio Teson • Wednesday, June 18, 2025 • 2 min read

• Last updated: Wednesday, June 18, 2025

Quick overview

International funds are optimistic about Brazilian assets, with two-thirds of investors expecting the Ibovespa index to exceed 140,000 points.
Expectations for Argentine assets have significantly improved, with over half of investors anticipating a stronger rally in the next six months.
The share of investors holding a neutral view on Argentine asset prices has dropped from nearly 20% to under 10%.
Concerns about a stronger U.S. dollar have surpassed worries about U.S. tariffs, although most participants still predict a weakening dollar this year.

International funds operating in Latin America are showing high expectations for Brazilian assets. However, when it comes to Argentina, many are anticipating a stronger performance in the coming semester.

The latest Bank of America (BofA) survey of institutional investors and fund managers focused on Latin America—conducted before Israel’s attack on Iran—reveals rising optimism around the future performance of Argentine assets.

While Brazil continues to dominate investor attention due to its scale, history, and this year’s election cycle, more than half of respondents now expect a stronger rally in Argentine asset prices over the next six months. That’s a notable increase from 40% in BofA’s previous survey conducted in May.

Additionally, the share of investors with a neutral view on Argentine asset prices dropped significantly—from nearly 20% in May to under 10% now.

Brazilian Market Details

Optimism around Brazilian equities is also on the rise. Two-thirds of participants now expect the Ibovespa index to surpass 140,000 points, compared to 43% last month. Specifically, nearly 40% forecast the index reaching between 140,000 and 150,000, while about 25% expect it to go even higher.

Expectations around earnings revisions have improved as well: 45% of respondents foresee upward revisions this year, up from just 22% the previous month.

“Elections in Brazil remain in the spotlight, but 57% of respondents said that investors are likely to add positions only in the first quarter of 2026 or later,” noted BofA’s LatAm Fund Manager Survey (FMS).

Another key finding from the survey—which includes fund managers overseeing approximately $40 billion in regional assets—is that both cash holdings and portfolio protection levels have increased. Still, most participants plan to increase their equity exposure in the next six months.

USD/BRL

When it comes to external risks, a stronger U.S. dollar has now overtaken U.S. tariffs as the top concern. Nonetheless, most FMS participants still expect the dollar to weaken this year, and they forecast the Brazilian real to trade between 5.41 and 5.70 per USD in 2025, improving from a previous range of 5.71 to 6.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.