The upcoming presidential election in Brazil—while still more than a year away and slated for October 2026—is already causing ripples in the market, according to the region’s top sell-side firms.
“Historically, election years in Brazil tend to be more volatile, and the evidence this year has been no different,” according to Thiago Macruz, head of research at Itaú BBA.
While that volatility creates opportunities for investors with shorter time horizons — particularly hedge funds that can move quickly to capture market dislocations—it often leads longer-term investors to take a more cautious stance, adopting a wait-and-see approach with less active positioning, he added.
2025 started better than anyone could have expected for emerging markets in general and Brazil in particular, according to Carlos Sequeira, head of research at BTG Pactual.
“This was mainly due to decisions taken by the US government that ended up causing investors to rotate part of what they had invested in the US to other markets, including Brazil,” he said. “The rotation brought enough money into Brazilian equities to move markets higher and cause the BRL to appreciate.
“Economic activity has been resilient, even under a scenario of incredibly high interest rates, and inflation has been trending down, increasing market expectations that a monetary easing cycle may start sooner rather than later, maybe still this year,” he added.
As 2026 approaches, more visibility on the potential candidates, coalitions and alliances our view is that elections will dominate the debate and be an important driver for local markets, Sequeira said.
“It’s been a roller-coaster for investors, as Brazilian stocks rebounded to be among the world’s best performers this year, from being the worst last year,” confirmed Francisco Navarrete, head of Latam Research at Bradesco BBI. “Investors have been shifting their focus to the twin catalysts of lower Brazil interest rates and the early start of the 2026 election cycle.”
In this environment, there is little surprise that these domestic firms with deep ties to the country and overall region have also been recognized as the top firms by Extel’s annual survey of research teams.
Itaú BBA has defended its title as the No. 1 research team in Brazil, according to more than 700 research and investment professionals at 414 asset management firms with significant holdings in the region. The firm is joined by BTG Pactual who improved one place to share the top spot in this year’s ranking and also earned 19 overall team positions. Bradesco BBI took a narrow third with 18.
Santander was most improved, up from sevenths place to fourth, and UBS was the highest performing international firm up from sixth place to round out the top five.
“Historically, election years in Brazil tend to be more volatile, and the evidence this year has been no different,” according to Thiago Macruz, head of research at Itaú BBA.
While that volatility creates opportunities for investors with shorter time horizons — particularly hedge funds that can move quickly to capture market dislocations—it often leads longer-term investors to take a more cautious stance, adopting a wait-and-see approach with less active positioning, he added.
2025 started better than anyone could have expected for emerging markets in general and Brazil in particular, according to Carlos Sequeira, head of research at BTG Pactual.
“This was mainly due to decisions taken by the US government that ended up causing investors to rotate part of what they had invested in the US to other markets, including Brazil,” he said. “The rotation brought enough money into Brazilian equities to move markets higher and cause the BRL to appreciate.
“Economic activity has been resilient, even under a scenario of incredibly high interest rates, and inflation has been trending down, increasing market expectations that a monetary easing cycle may start sooner rather than later, maybe still this year,” he added.
As 2026 approaches, more visibility on the potential candidates, coalitions and alliances our view is that elections will dominate the debate and be an important driver for local markets, Sequeira said.
“It’s been a roller-coaster for investors, as Brazilian stocks rebounded to be among the world’s best performers this year, from being the worst last year,” confirmed Francisco Navarrete, head of Latam Research at Bradesco BBI. “Investors have been shifting their focus to the twin catalysts of lower Brazil interest rates and the early start of the 2026 election cycle.”
In this environment, there is little surprise that these domestic firms with deep ties to the country and overall region have also been recognized as the top firms by Extel’s annual survey of research teams.
Itaú BBA has defended its title as the No. 1 research team in Brazil, according to more than 700 research and investment professionals at 414 asset management firms with significant holdings in the region. The firm is joined by BTG Pactual who improved one place to share the top spot in this year’s ranking and also earned 19 overall team positions. Bradesco BBI took a narrow third with 18.
Santander was most improved, up from sevenths place to fourth, and UBS was the highest performing international firm up from sixth place to round out the top five.
Itaú BBA’s Macruz credited a key differentiating factor of his team—especially over the past year—has been its ability to deliver research products that go beyond the traditional sector approach. “We have focused on creating cross-sector work that leverages the expertise of multiple teams,” he said. For example, Itaú BBA’s retail and financials analysts partnered to produce joint reports on themes that cut across both industries, such as consumer credit dynamics and the evolution of digital payments. Similarly, its oil & gas and utilities teams worked together on reports addressing issues that impact both sectors, such as energy transition and regulatory developments.
“This collaborative agenda across research cells makes our written product stand out, as it combines different perspectives into a single, integrated view,” he added. “It not only differentiates us in the market, but also captures the interest and attention of clients who value a broader and more holistic analysis of key investment themes.”
BTG Pactual’s Sequeira reported that the firm has also been investing in the country. BTG Pactual brought in two of the most senior Latin American oil and gas and utilities analysts, which lead to it regaining the #1 in Brazil research. “We have high quality, experienced analysts supported by a best-in- class team of associates,” he added.
At Bradesco BBI, Navarrete said that the firm continues to invest in research “despite tough markets, adding seasoned analysts, and expanding [its] Latam footprint, which is critical for the success of the business.” Bradesco BBI also has plans to grow the department and invest in AI. “AI is part of the investments to scale up our firepower,” he added.
It is also a doubled-edge sword. Many firms acknowledged artificial intelligence as both a potential threat and a major opportunity for sell-side research. “On the one hand, AI is bringing structural changes to the industry that we will need to adapt to,” said Macruz. “On the other, it can be a powerful tool to make our team more productive and creative, freeing up time to deepen our client relationships and focus on delivering differentiated insights.”
The “commoditization” of access to information and analysis is the biggest risk to sell-side research as AI advances, confirmed Navarette. “To be relevant, sell-side analysts need to keep pushing to be at the frontier of knowledge of their sector and coverage to keep adding value to the buy side,” he said. “This requires retaining teams that are seasoned, train future generations of analysts, and obviously know how to use and deploy resources including CA and AI itself.”
Good fundamental research is predicated in deep analysis, understanding trends and anticipating them, added BTG Pactual’s Sequeira. “This is what we encourage our team to do,” he said. “Some sell-side research houses are too focused on short-term trading calls.”
And providing research in Brazil will continue to be a unique proposition compared to the wider region. “In general, it feels much more in-depth in the contact with different stakeholders—corporates, board, investors, regulators, etc.—and channel checking—via corporate access—plays a big role in tracking investment thesis versus other Latam markets,” Navarette said.
What makes the Brazilian market unique compared to the rest of Latin America is its depth and complexity, both in terms of sectors and the number of listed companies, according to Macruz. In addition, Brazil has a very developed domestic buy-side industry, particularly in multi-asset and equit funds. As a result, a significant share of our client interactions takes place locally with Brazil-based investors.
“In Brazil, investors can build diversified portfolios that reflect a wide variety of industries across the economy—from financials and commodities to consumer, healthcare, infrastructure, and technology. This creates demand for a more sophisticated level of research coverage,” he concluded.
“This collaborative agenda across research cells makes our written product stand out, as it combines different perspectives into a single, integrated view,” he added. “It not only differentiates us in the market, but also captures the interest and attention of clients who value a broader and more holistic analysis of key investment themes.”
BTG Pactual’s Sequeira reported that the firm has also been investing in the country. BTG Pactual brought in two of the most senior Latin American oil and gas and utilities analysts, which lead to it regaining the #1 in Brazil research. “We have high quality, experienced analysts supported by a best-in- class team of associates,” he added.
At Bradesco BBI, Navarrete said that the firm continues to invest in research “despite tough markets, adding seasoned analysts, and expanding [its] Latam footprint, which is critical for the success of the business.” Bradesco BBI also has plans to grow the department and invest in AI. “AI is part of the investments to scale up our firepower,” he added.
It is also a doubled-edge sword. Many firms acknowledged artificial intelligence as both a potential threat and a major opportunity for sell-side research. “On the one hand, AI is bringing structural changes to the industry that we will need to adapt to,” said Macruz. “On the other, it can be a powerful tool to make our team more productive and creative, freeing up time to deepen our client relationships and focus on delivering differentiated insights.”
The “commoditization” of access to information and analysis is the biggest risk to sell-side research as AI advances, confirmed Navarette. “To be relevant, sell-side analysts need to keep pushing to be at the frontier of knowledge of their sector and coverage to keep adding value to the buy side,” he said. “This requires retaining teams that are seasoned, train future generations of analysts, and obviously know how to use and deploy resources including CA and AI itself.”
Good fundamental research is predicated in deep analysis, understanding trends and anticipating them, added BTG Pactual’s Sequeira. “This is what we encourage our team to do,” he said. “Some sell-side research houses are too focused on short-term trading calls.”
And providing research in Brazil will continue to be a unique proposition compared to the wider region. “In general, it feels much more in-depth in the contact with different stakeholders—corporates, board, investors, regulators, etc.—and channel checking—via corporate access—plays a big role in tracking investment thesis versus other Latam markets,” Navarette said.
What makes the Brazilian market unique compared to the rest of Latin America is its depth and complexity, both in terms of sectors and the number of listed companies, according to Macruz. In addition, Brazil has a very developed domestic buy-side industry, particularly in multi-asset and equit funds. As a result, a significant share of our client interactions takes place locally with Brazil-based investors.
“In Brazil, investors can build diversified portfolios that reflect a wide variety of industries across the economy—from financials and commodities to consumer, healthcare, infrastructure, and technology. This creates demand for a more sophisticated level of research coverage,” he concluded.
