Access to Co-Investments Becomes a Key Factor in Manager Selection

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Co-investments are becoming an increasingly important route through which U.S. institutional investors access private markets, according to the latest edition of Cerulli Edge—U.S. Institutional Edition.

According to its analysis, as demand continues to grow, co-investment capabilities are no longer simply an option for asset managers: they are becoming a standard expectation and a key factor in attracting institutional interest.

“Within private markets, co-investments have emerged as a highly relevant alternative for institutions seeking to reduce the distance between pooled fund structures and direct asset ownership,” Cerulli notes. Its analysis concludes that a net 16% of asset owners expect to increase their allocation to co-investments over the next 24 months; 19% anticipate increasing it, compared with only 3% who expect to reduce it.

Cerulli points out that institutions use co-investments not only to reduce fees, but also to gain direct visibility into transaction analysis and structuring, as well as to strengthen their relationships with managers. According to Cerulli, management firms state that 42% of co-investment partnerships originated through direct relationships with asset owners, while nearly a quarter (24%) emerged through investment consultants and outsourced chief investment officer (OCIO) service providers.

Key findings

Its conclusion is that co-investments have become a fundamental mechanism for creating and strengthening these relationships. “Access to co-investments is now part of the initial manager evaluation process, rather than something negotiated separately after the investment has been made. Managers unable to offer this type of access are reducing their potential universe of limited partners, and not as a future risk, but as a present reality,” said Gloria Pais, Research analyst at Cerulli.

Another conclusion of the analysis is that intermediaries,  consultants and OCIOs, deserve increasing attention. “Mid-sized institutions are increasingly accessing co-investments through intermediaries, gaining both cost advantages and access to transactions they likely could not originate on their own,” Pais added.

The expert noted that “proactively developing these intermediary relationships, rather than treating them as secondary to direct institutional contact, is increasingly becoming a smarter allocation of business development resources.”

Less Manhattan, More Miami: The Battle for Latin American Wealth Accelerates in the U.S.

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The discussion surrounding a possible new tax on second homes in New York City has once again fueled a trend that for several years has been reshaping the wealth map in the United States: competition among states to attract private capital, family offices, and international fortunes, particularly from Latin America.

Although the initiative is still going through approval processes and political debate, the mere announcement is already being interpreted by wealth managers and investors as another sign of growing tax pressure on high-net-worth individuals in New York. At the same time, it strengthens the positioning of jurisdictions such as Florida and Texas as preferred destinations for the relocation of Latin American wealth.

According to the proposal being discussed in New York, the new levy would target owners of high-value second homes, amid increasing political pressure to finance affordable housing programs and close urban fiscal gaps. The debate also comes at a time when global wealth migration is gaining speed and sophistication.

“Today, wealth migration is no longer only international; it is also happening within the United States,” Juan Carlos Eguiarte, country manager of BAIA Capital in Mexico, explained in an interview with Funds Society.

For the executive, the phenomenon cannot be analyzed in isolation or solely from a tax perspective. In reality, it reflects structural competition among U.S. jurisdictions to capture highly mobile private capital.

“Florida has spent years consolidating itself as one of the main recipients of private capital and high-net-worth individuals’ wealth. It is no longer just a retirement or purely residential city; today Miami has become a platform for attracting private capital,” he noted.

Miami’s transformation has been particularly visible since the pandemic. Investment funds, hedge funds, private equity firms, and family offices moved operations from New York and California, attracted by a more favorable tax environment, lower state taxes, more flexible regulation, and an increasingly deep financial ecosystem.

Data from Henley & Partners estimates that the United States continues to be the world’s leading destination for migrating millionaires, while Florida ranks among the states with the highest growth in ultra-high-net-worth residents. Miami-Dade alone has recorded a sharp increase in premium real estate prices in recent years, partly driven by Latin American buyers.

The appeal for investors from the region is not limited to the tax component. Factors such as legal certainty, regulatory stability, quality of life, and international connectivity are carrying increasing weight in wealth-related decisions.

“The southern states of the United States are even more favorable in climate-related matters, and Florida has also become a Latin American capital,” Eguiarte pointed out.

The mobility of capital, he added, has now reached unprecedented levels. “When tax and regulatory differences begin to become material, capital optimizes jurisdiction, whether internationally or within the United States itself.”

In that context, New York maintains its position as the continent’s main financial center but faces growing challenges in retaining part of the international private capital that historically gravitated toward Manhattan and other premium markets.

The discussion also comes at a particularly relevant moment for Latin America. Regional economic slowdown, political uncertainty, and the limited capacity to absorb capital in some economies are pushing business families and large fortunes to diversify structures and jurisdictions.

Eguiarte believes the phenomenon should not be interpreted solely as capital flight.

“I do not see it so much as capital flight, but rather a lack of absorption capacity in Mexico and Latin America because economies are not growing at the same pace as fortunes,” he stated.

According to his analysis, the problem lies in the scarcity of productive projects and infrastructure capable of channeling large private capital surpluses with sufficiently attractive returns and long-term stability.

“This triggers the need to seek jurisdictions and locations capable of absorbing that productive capital,” he explained.

Paradoxically, Latin America offers considerably higher nominal interest rates than the United States. However, high-net-worth investors are increasingly weighing variables such as sovereign risk, legal certainty, and institutional stability.

“It is no coincidence that interest rates in Latin America are much higher; they respond to risk factors and the need to provide an additional premium to investors,” the executive indicated.

The broader context of the discussion, wealth sector specialists agree, is that global capital no longer competes only among countries, but among cities and states capable of building attractive ecosystems for international wealth.

“The jurisdictions that manage to combine stability, efficiency, and market depth will be the ones that capture the next generation of wealth,” Eguiarte concluded.

Dividend ETFs, a Focus of Interest for Investors

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Artificial intelligence-related companies have captured investors’ attention in recent times. However, dividend-focused ETFs serve as a reminder that there is life beyond the leading players of the new technological revolution and that including income-related vehicles is good protection for portfolios.

The data supports this view, as investment flows into ETFs listed in the United States reached $6.3 billion in April, implying net inflows of $36.9 billion so far this year. This figure is slightly higher than the $35 billion recorded in the same period last year, according to investment flow figures published by First Trust.

At S&P Global, they note that dividends play an important role in generating total equity returns. Since 1926, they have contributed approximately 31% of the total return of the S&P 500, while capital appreciation has accounted for the remaining 69%. Therefore, “sustainable dividend income and the potential for capital appreciation are important factors for total return expectations,” according to the firm.

Companies use stable and growing dividends as a sign of confidence in their business outlook, while market participants view those track records as an indication of corporate maturity and balance sheet strength, according to S&P Global.

ETFs that invest in dividend-paying stocks can be “simple and comprehensive solutions” for those seeking income, according to Morningstar. The firm lists several reasons. The first is that dividend ETFs hold a portfolio of dividend-paying stocks and therefore “offer immediate diversification.”

In addition, dividend ETFs “typically have low costs,” and they are also easy to buy and sell. “Many of the best dividend exchange-traded funds are managed by popular asset managers that have brokerage platforms,” the firm notes. Lastly, investors who want exposure to dividend-paying stocks through an ETF “have a wide variety of good exchange-traded funds to choose from.”

Although dividend ETFs focus on income, each one applies very different strategies and, as a result, their performance can vary considerably from one another. For this reason, Morningstar believes that investors seeking passive income through dividend ETFs “should do their research carefully to understand exactly what the ETF invests in before buying it.”

At VanEck, they point to the shift in the interest rate environment during this decade and the typically resilient performance of high-dividend securities as one of the reasons behind the popularity of some of their dividend ETFs. The firm explains that during the low interest rate era of the 2010s, investors favored “growth at any price.” But current interest rates make the compensation offered by high dividends more attractive. Therefore, they note that dividend strategies can perform well not only in bullish stock markets but also during periods of volatility, although every market cycle is different.

A Debate on the “Heavy Hand” of Regulation and the Rise of ETFs

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What began in 2014 as an effort to give economists a voice in an environment dominated by lawyers has now become the epicenter of empirical analysis on financial oversight. At the opening of the SEC Annual Conference, the balance of more than a decade of supervision delivered a clear warning: regulation cannot be a series of “random acts” of punishment.

One of the topics addressed during the event was the analysis of the “broken windows” policy. “This theory, adapted from urban criminology, suggests that prosecuting minor infractions prevents larger crimes. However, the analysis presented questions whether this approach can be transferred to the complex world of white-collar crime,” experts noted during the conference.

Mark T. Uyeda, SEC commissioner, explained that while empirical evidence suggests that monitoring minor infractions can reduce serious financial misconduct, the industry warns of a dangerous side effect: the diversion of limited resources. “Abusing discretionary authority undermines the predictability that markets require,” participants heard during the forum, noting that imposing sanctions over technical issues — such as the use of personal mobile devices for work communications — does not always reflect a consensus on what constitutes unacceptable conduct.

The debate also revolved around the SEC’s own success metrics. In this regard, there is concern that if the success of an administration is measured solely by the number of enforcement actions and the amount of fines collected, regulatory staff may prioritize quantity over the quality of financial justice. According to the experts, the complexity of the current regulatory framework leaves excessive room for “novel” legal interpretations that could chill socially valuable economic activities.

Beyond oversight, the conference also addressed the transformation of institutional savings through the use of ETFs. The figures are striking: in 2005, ETFs represented just 3.2% of assets compared with mutual funds. By 2025, that figure had climbed to nearly 30% of the market, with $13.4 trillion in assets.

According to some studies, a new phenomenon is emerging: managers of these vehicles may be incentivized to adopt highly volatile strategies to attract an increasingly broad base of retail investors, posing new challenges for system stability.

The conference concluded by reaffirming the need for academia to scrutinize the regulator. “In a market that now includes cryptoassets and overnight stock trading, data analysis presents itself as the only tool capable of ensuring that public policies are not merely political reactions, but decisions grounded in economic reality,” Uyeda reminded attendees.

Attractive Returns and Tight Spreads Put the Focus on Issuer Selection

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Avenue ETP market FlexFunds
Photo courtesyDaniel Ender, portfolio manager on Robeco’s credit team.

One of the clearest trends in the credit market is how tight spreads are in historical terms. In the view of Daniel Ender, portfolio manager on Robeco’s credit team, saying that this translates into a phase of “market complacency” offers an overly simplistic view of what is happening in this asset class. In this interview, we spoke in depth with Ender about this and other trends in the credit market.

After the strong tightening of spreads in recent quarters, do you believe investment-grade credit still offers relative value, or are we already entering a more complacent phase?

I think it very much depends on how value is defined; it is quite subjective. Spreads are undoubtedly tight in historical terms, but labeling this as pure complacency is too simplistic. The key point is that the starting point for total returns remains attractive, which continues to support demand, especially from yield-focused investors. That said, if you look at spreads as compensation for risk, the picture is less convincing. We believe spreads offer a limited cushion against the range of risks that are building up in the system. So, it is not outright complacency, but rather a market supported by strong technical factors and demand for yield. From here, returns will need to come much more from issuer selection than from further broad spread compression.

What risks do you think corporate credit investors are currently underestimating?

I think the main risk is that, on the surface, everything appears to be fine, but underneath, more stress is building. High interest rates themselves are not the problem; companies have largely adapted to them. The issue is what happens when higher financing costs are combined with slowing growth and more pressure on certain business models. We are starting to see this in some market segments, especially in more leveraged companies and sectors facing disruption, such as certain areas of software. Refinancing is becoming more difficult, and at the same time, margins are under pressure. It is not a systemic problem at this stage, but it is something that could gradually spread. Markets tend to ignore it until it becomes more visible, and then the adjustment can be quite rapid.

In your case, how are you currently balancing carry and quality in the portfolio?

We are keeping the portfolio beta broadly neutral because spreads do not justify taking on more risk at this point. The focus is clearly on generating alpha through issuer selection rather than relying on beta. In practice, that means avoiding areas with limited transparency and growing stress, such as private credit proxies and BDCs; being selective in new issues where concessions are attractive; and favoring structures and sectors where compensation is structural rather than cyclical. This is not a “buy the dip” environment, but rather an environment where returns must be earned through selection.

We have seen strong resilience in corporate fundamentals. To what extent do you believe that strength can be maintained if growth continues to slow?

They have been very resilient so far, but we are starting to see early signs of pressure. Consumption is being supported by low savings levels, which is not sustainable, and the labor market is gradually weakening. At the same time, higher energy prices are pushing inflation upward and growth downward. So, we do not expect a sharp deterioration, but rather a gradual erosion of fundamentals if this situation continues.

From a sector perspective, where are you currently seeing the greatest opportunities, and conversely, where do you see the greatest risk of excessive spread compression?

We are positioning around the idea of HALO: Hard Assets, Low Obsolescence. These are sectors such as infrastructure, utilities, pipelines, or mining, where assets are tangible, difficult to replicate, and less exposed to disruption. On the other hand, we see clear risks in areas exposed to artificial intelligence disruption, particularly software, and in segments heavily dependent on private credit financing. What is interesting is that, beneath the surface, dispersion is already increasing, even though overall spreads still appear tight.

Have we already forgotten about ESG? What role is ESG integration playing in credit portfolio construction?

It remains a central part of how we assess credit risk; it has not been sidelined at all. We continue integrating ESG analysis into every issuer we cover as part of our fundamental credit work, including our internal scoring frameworks and credit committee discussions. So, it is not a separate additional layer; it is embedded in how we form our investment views. More broadly, we do not see returns and sustainability as mutually exclusive. Recent geopolitical developments have brought it back to the center of the agenda, especially in Europe, which is favorable for parts of the renewables and infrastructure space. So, if anything, ESG is evolving rather than disappearing: it is becoming increasingly linked to resilience, security of supply, and long-term credit quality.

Looking ahead to the next 12 months, what do you believe will be the main catalyst that could significantly change credit market behavior?

The main catalyst is the interaction between growth and inflation. The current energy shock is a good example of that dynamic: it is inflationary, but at the same time it weighs on growth, creating a difficult backdrop for credit. There are several catalysts that could alter that balance. A more pronounced slowdown in growth, for example through weaker employment data, including possible second-round effects stemming from artificial intelligence disruption, would be one. A prolonged conflict in the Middle East leading to structurally higher energy prices and potentially forcing a shift in central bank policy would be another. Private credit is part of the risk landscape, but we do not view it as systemic. The more relevant point is that negative headlines coming from that segment could affect market sentiment and trigger episodes of volatility in public markets. So, although the base case remains supported by solid technical factors, the main risk is that the macroeconomic environment turns out to be less benign than what the market is currently pricing in.

With the Largest Monthly Fundraising in Its History, Avenue Prepares to Enter the ETP Market with FlexFunds

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The sharp depreciation of the dollar against the Brazilian real has been good news for Avenue. In April, the leading platform for access to the U.S. market recorded the best monthly fundraising in its history, according to Avenue’s Institutional Director, Caio Azevedo. The company does not disclose figures.

“We had the best fundraising ever recorded,” the executive says in an interview with Funds Society, attributing the movement to exchange rate volatility. “Whether up or down, we managed to attract funds very well. Usually, inflows into the platform are lower during periods of less fluctuation,” he notes.

He says the current sentiment is something similar to FOMO (Fear of Missing Out) on the part of the public, which sees the dollar at 5 reais as a good buying price. And the flow is spread across various channels, such as wealth, advisory, and family offices. The destination of that capital is concentrated mainly in the most popular U.S. equities.

“S&P, Nasdaq, ETFs, and stocks are still the main ones,” he says. “We still have a relevant flow toward the AI sector. Toward the Magnificent Seven.”

ETPs Enter the Platform

On the institutional side, Azevedo continues seeking to expand the offering of structures for the B2B market. In this context, Avenue is preparing the launch of ETPs (Exchange Traded Products) in partnership with FlexFunds, especially targeting smaller advisory firms and asset managers seeking access to offshore structures without the need to establish their own vehicles.

ETPs are internationally listed certificates — usually through Ireland and distributed by platforms such as Euroclear — that allow investment strategies to be “packaged” into a tradable asset with its own ISIN. In practice, the structure works as a simpler and more efficient alternative to traditional offshore funds, reducing operational costs and facilitating the international distribution of financial products.

“If you are an asset manager or advisor and do not have the scale to operationalize an offshore structure, the ETP solves that,” he says.

According to him, there are already conversations with more than 15 asset managers and advisory firms interested in the model. The expectation is that the structure will be operational within the next three to four months. The product is expected to function mainly as a tool for the institutional and advisory market, allowing strategies to be packaged into an international asset with its own ISIN.

Platform Launches Fund with Verde Asset

The timing could not be better for some Brazilian asset managers that have begun to see Avenue as a new way to attract resources from local investors: through international funds. With a Cayman-based structure called Avenue Funds Hub, the company created a new potential distribution channel for Brazilian asset managers interested in reaching offshore investors.

“We set up a structure that facilitates access to those funds. Everything is operationalized by Avenue,” he explains. According to him, asset managers do not necessarily need to have their own offshore structure to access the platform.

“We managed to create a simpler, more direct, and less costly structure,” he says. The movement began with names already well known in the Brazilian market, such as Kinea, Itaú Asset, and Verde, which started making global products available through the platform’s structure.

In the case of Verde, the asset manager debuts on Avenue with a global equity strategy heavily exposed to the artificial intelligence theme, betting that the current cycle of investment in technology is still far from over. The portfolio combines companies linked to infrastructure, semiconductors, and U.S. technology, reflecting the firm’s view that AI represents a structural transformation of the global economy.

“It’s curious, because when Brazilians think about investing abroad, they always imagine the major global players. But investors also want access to the brands they already know here in Brazil,” says Azevedo.

According to him, Avenue is in talks with several other Brazilian asset managers interested in accessing the international channel.

“A lot is happening, and there are names that clients would really like to access,” he says.

In addition to Brazilian funds, the company also distributes a broad international platform. Today, the platform includes more than one thousand global funds, including fixed income, equities, alternatives, and UCITS strategies.

More Bankers, More Connectivity, and More Tools: The Keys to Citi’s Wealth Business

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LinkedIn / Andy Sieg, Head of Wealth at Citi

As they continue moving forward on their path to make the wealth management unit more profitable, U.S. banking giant Citi is betting on increasing its number of bankers, leveraging the relationship between the unit and retail banking in the United States, and taking advantage of technological tools, including developments involving artificial intelligence. This is the roadmap outlined by Andy Sieg, Head of Wealth at the firm, during the company’s Investor Day, to strengthen the unit within the bank.

“How are we going to grow this business? Well, it really comes down to focusing on a few key areas: products, coverage, and platforms,” the executive said during his presentation.

The firm has managed to steadily increase the volume of capital its clients are investing, aiming to strengthen relationship-based pricing dynamics. “Over time, this is going to drive results,” Sieg predicted. In fact, he added, an increase has already been seen: while in 2022 investments represented 42% of clients’ total balances, that figure has now risen to 52%.

The U.S. bank’s plan to grow its wealth management business includes strengthening service across all client segments, which are divided among its Citi Private Bank, U.S. Citigold, International Citigold, and Wealth at Work coverage programs.

This includes expanding its roster of professionals. Sieg announced that the firm plans to hire more than 100 private bankers in the short term, which would allow it to grow in “key markets.” At the same time, he projected that they will add more than 400 client advisers and personal bankers.

One of the things they seek to leverage is the clients the bank already has. The firm estimates at $5 trillion the potential market represented by wealth management clients or transactions that are not currently part of Global Citi Wealth’s existing platforms. “That’s $5 trillion in investable assets belonging to clients who are already in our bank and already trust us,” Sieg emphasized.

Integration With Retail Banking

Along those lines, one of the central pillars of the strategy has been integrating the Wealth division with the U.S. retail banking business, as part of a corporate realignment announced last year.

In fact, the U.S. bank has seen internal synergies accelerate, with a 40% year-over-year increase in referrals within the company during the first quarter. That, together with the greater focus on investment advisory, increased net new invested assets (NNIA) by 1.7 times per adviser since 2023.

“With retail banking realigned with Wealth, Kate Luft (Head of Retail Bank and Citigold) and I are dedicated to making the most of this massive growth opportunity,” Sieg said, adding that they are planning “significant investments” in Citibank, including branch improvements, hiring, and technological tools.

In addition, Sieg emphasized the importance of the high-net-worth investor channel for the firm. The average Citi Private Bank client has a net worth of more than $400 million and highly varied global needs. “Clients like these are few in number, but they represent a large and fast-growing market,” the executive said, projecting that the cross-border UHNW segment would grow to $6 trillion by 2030.

“That’s not just a tailwind. That’s a structural shift, and the global platform we’ve built is perfectly suited for it,” said the Head of Wealth.

Use of Technology

In addition to these changes, Citi has been pushing digital transformation in its wealth management business, developing a series of tools in partnership with technology firms. “We have embraced the firm’s mantra that we need to be modern and simple, and we are accelerating the pace by working with top-tier partners such as Palantir and Google,” Sieg noted.

According to the executive, by incorporating generative AI technology into research and Citi’s proprietary models, they have accelerated the process from investment thesis to portfolio construction.

In addition, they recently launched a new tool called Citi Sky. It is an AI-based virtual assistant supported by Google DeepMind and Google Cloud. “Now, it’s more than a digital tool. It gives our clients a new layer of intelligence that is conversational, actionable, and secure,” Sieg said, adding that this tool “is going to change the wealth management model.”

Still, the Head of Wealth emphasized that Citi Sky is only the latest—and most visible—advance in its technology platform. The model they use, in that regard, has four major layers: secure and trusted data; core capabilities for products, analytics, and risk control; AI orchestration; and client and adviser experience.

A More Profitable Business

The firm has already made progress in improving the profitability of the business in recent years, taking RoTCE from negative territory in 2023 to 11% in the first quarter of 2026. They attribute this improvement to increased revenues, cost control, and balance sheet discipline.

“That’s quite a bit of progress, but honestly, we’re only halfway to what a strong Wealth business should look like,” the division head said during his presentation.

Part of this transformation has been a campaign to sharpen the company’s focus over the past few years. This included exiting non-core businesses such as trusts and proprietary fund management; reducing the workforce by 20%; and simplifying the leadership structure.

Carmen Alonso, New Global CEO of Santander AM

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LinkedIn / Carmen Alonso, Global CEO of Santander Asset Management as of July.

Banco Santander has appointed Carmen Alonso as the new Global CEO of its asset management division, Santander Asset Management (SAM). Alonso was Head of Clients for Europe and the Middle East at the alternative asset manager Patria Investment, and her appointment will become effective next July.

This appointment comes four months after Miguel Ángel Sánchez Lozano was named interim CEO of the asset manager to replace Samantha Ricciardi in the role.

Alonso has more than 30 years of international experience in asset management and investment banking. Before serving in her role at Patria Investments, she was Head of the UK and Iberia at Tikehau Capital. Previously, she held the position of Managing Director at Morgan Stanley in the leveraged finance and debt acquisition area. She has also held senior positions at UBS, Merrill Lynch, and HVB.

She holds a degree in Business Administration from Boston University and completed the Stanford Executive Program at the Stanford Graduate School of Business. In addition, she holds an MBA from Babson College.

Sell in May?: Arguments for Buying With Markets at All-Time Highs

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Capital markets appear to be walking a tightrope: while the global economy continues to show remarkable resilience, headwinds—especially those stemming from oil prices—are becoming increasingly evident. The central issue remains the conflict between the U.S. and Iran and their fragile truce. After Donald Trump described Iran’s response to the latest U.S. peace proposal as unacceptable, the week begins with some risk aversion, reversing part of the gains seen last week. Now that most of the corporate earnings season has concluded, investors’ attention will focus more heavily on the Strait of Hormuz and whether traffic through this strategic chokepoint improves.

In the opinion of Stefan Rondorf, Senior Investment Strategist, Global Economics & Strategy at AllianzGI, “markets have learned to live with geopolitical tensions, but that does not mean these risks have disappeared. Quite the opposite: recent developments show that the ceasefire remains extremely fragile and there is barely any end to the crisis in sight.”

This risk contrasts with market behavior, which closes the period on a constructive note. “Investor optimism resurfaced amid the possibility that Washington and Tehran could reach an agreement that would allow the Strait of Hormuz to reopen and introduce a moratorium on uranium enrichment. As a result, tensions in equity markets gradually eased. Oil prices fell sharply, moving back below $100, and expectations for a lasting resolution to the conflict in the Middle East increased,” highlight analysts at Edmond de Rothschild AM.

For Manuel Pinto, Head of Research at XTB, after months of talking about the famous TACO Trade—the idea that Trump always ends up backing down when economic tensions begin affecting markets—Wall Street is beginning to adopt a new concept: the NACHO Trade. “The term refers to Not A Chance Hormuz Opens, meaning the growing sense in the market that the Strait of Hormuz could remain partially blocked for longer than expected. And that has enormous implications for inflation, oil, central banks, and bonds. The big difference is that while stock markets continue reaching all-time highs thanks to the momentum from artificial intelligence and corporate earnings, the bond market is already beginning to price in a much more uncomfortable scenario: persistently high oil prices, more stubborn inflation, and elevated interest rates for longer. That is why the NACHO Trade is causing very aggressive movements in the U.S. yield curve. Long-term bond yields continue rising while the market reduces expectations for rate cuts in 2026. In other words, Wall Street is beginning to assume that the Federal Reserve could take much longer to ease monetary policy if the energy shock continues putting pressure on inflation,” he explains.

Sell in May?

In this context, investors are once again hearing the stock market saying “Sell in May and go away, and come back on St. Leger’s Day,” according to which investors consider selling their holdings in May to avoid lower returns during the summer and autumn months, returning in November.

However, global equity markets have staged a strong recovery in recent weeks, overcoming prevailing uncertainty with surprising agility. After falling for five consecutive weeks through the end of March, the S&P 500 is on track to achieve its sixth consecutive week of gains, while both the Nasdaq and the S&P 500 remain near all-time highs.

According to Mark Haefele, CIO of UBS Global Wealth Management, recent gains have been driven by hopes for a more convincing de-escalation in the Strait of Hormuz, adding to favorable factors such as strong corporate earnings, resilient fundamentals, the Fed’s inclination to maintain flexible monetary policy, and enthusiasm related to AI.

“With a less negative geopolitical backdrop for markets, we believe they can once again focus on the fundamentals that truly support the rally in global equities. We maintain an attractive view on U.S. equities and expect the S&P 500 to rise toward year-end, supported by healthy earnings growth and a monetary environment that remains favorable. Within U.S. equities, we continue to favor the consumer discretionary, financial, healthcare, industrial, and utilities sectors, while maintaining a constructive stance on areas of the market linked to AI,” says Haefele.

Investment Ideas

Jessica Henry, Head of Equity Investments at Federated Hermes Limited, for example, sees opportunities in emerging markets, where favorable demographics, rising incomes, and exposure to attractive end markets continue supporting long-term growth. “Despite these favorable structural tailwinds, valuations remain attractive compared with developed markets, representing an appealing risk-reward opportunity. We also see value in capital-intensive businesses and commodity-sensitive stocks, which benefit from a favorable environment of higher commodity prices driven by geopolitical conflicts, supply constraints, and long-term structural shifts in demand,” adds Henry.

Finally, analysts at Neuberger believe that global growth and equity markets will remain resilient. “Although we remain constructive on small-cap companies, we believe the current macroeconomic environment slightly favors large, high-quality companies, especially in a context of increasing geopolitical risk and uncertainty,” they note.

And they argue: “Consider that the forward P/E ratio of the S&P 500 has fallen 10% from its October 2025 peak. Meanwhile, earnings growth among large-cap listed companies remains strong: since the start of the conflict in Iran, forward earnings estimates for large companies have increased by 5%, with technology firms accounting for two-thirds of that increase. This trend suggests that, despite persistent macroeconomic uncertainty, the risk-return relationship for large-cap companies remains attractive.”

The Great Latin American Wealth Exodus: More Than $1 Trillion Seeks Refuge Outside the Region

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The migration of Latin American capital to the United States has ceased to be a temporary phenomenon and has become a structural trend in the global wealth management business. Today, the financial industry estimates that around $1 trillion belonging to Latin American investors is held outside their countries of origin, mainly channeled into U.S. financial platforms, international investment funds, and offshore structures managed from centers such as Miami, New York, and Texas.

According to the latest global wealth report from Boston Consulting Group, worldwide financial wealth held outside countries of origin reached $14.4 trillion in 2024, growing 8.7% annually, driven precisely by demand for geographic diversification and the search for financial “safe havens.”

Various sources such as Cerulli Associates, Latin Asset Management, and Boston Consulting Group provide estimates of the amounts of wealth that has flowed abroad from some of the region’s most representative countries: Brazil between $250 billion and $350 billion; Mexico between $180 billion and $250 billion; Argentina more than $300 billion; Colombia between $80 billion and $120 billion; Chile around $100 billion; and although figures for Venezuela are not publicly available, they are estimated at no less than $30 billion.

What Are They Seeking?

Behind this movement lies not only a search for global diversification or wealth sophistication. Increasingly, perceptions of political instability, regulatory uncertainty, currency volatility, and tax pressure across several regional markets also play a major role. As a result, a significant portion of Latin American private savings that could finance local funds, productive projects, or strategic investments within their own economies is instead finding refuge in jurisdictions considered more predictable and stable.

The phenomenon also reflects a profound shift in the mindset of high-net-worth families and Latin American institutional investors, who prioritize access to global markets, wealth protection, and international flexibility over domestic concentration of their assets. According to global reports from Boston Consulting Group, Latin America remains one of the regions with the highest proportion of private wealth placed offshore relative to total wealth. Historical studies by the firm estimate that nearly a quarter of Latin American financial wealth is held outside the region, a considerably higher percentage than in developed markets such as the United States, Western Europe, or Japan.

Miami has consolidated itself in recent years as the main hub for receiving Latin American capital outside the region. International banks, RIAs, multifamily offices, private equity firms, and wealth management platforms serving investors primarily from Brazil, Mexico, Argentina, Colombia, Chile, and Venezuela operate from there.

The “Flight,” a Phenomenon

The acceleration of this phenomenon intensified after the pandemic, alongside rising political tensions, tax changes, polarized electoral processes, and currency depreciations across several Latin American countries. This was compounded by the growth of the international private banking industry and the expansion of U.S. platforms specializing in high-net-worth Latin American clients.

The sophistication of the phenomenon has also changed. Two decades ago, much of the outflow of Latin American capital was primarily driven by wealth protection and defensive dollarization. Today, the movement also incorporates global asset allocation strategies, alternative investments, private credit, venture capital, international real estate, and global succession planning.

For Latin America, the problem goes beyond the financial sphere and is beginning to become a structural challenge for economic growth. Various analysts point out that a significant portion of these resources could be financing infrastructure projects, corporate debt, entrepreneurial capital, industrial expansion, or local capital markets. In countries with low levels of stock market depth such as Mexico, Colombia, or Peru, the partial return of this capital could transform the size of their financial markets, increase liquidity, and expand corporate financing sources.

Argentina is probably the most extreme example. Various private estimates suggest that Argentine assets held outside the local financial system far exceed the country’s international reserves and represent a significant share of GDP. The persistence of currency controls, high inflation, and recurring crises has consolidated over decades a structural culture of dollarization and offshore wealth management. Meanwhile, in Brazil and Mexico, although the phenomenon has a defensive component, it also reflects the growing internationalization of business families and family offices. Many of these structures already operate with a global logic, with simultaneous investments across Latin America, the United States, Europe, and Asia.

However, industry specialists warn that the sustained outflow of private wealth limits the region’s ability to build deeper and more sophisticated financial ecosystems. It also restricts the development of local alternative markets such as private equity, venture capital, infrastructure, or technological innovation financing.

The regional paradox is evident: while Latin America faces historic investment needs in infrastructure, energy transition, digitalization, housing, and productivity, a significant portion of its private savings finances international assets outside its economies. At the same time, the wealth migration trend appears far from reversing in the short term. The legal stability of the United States, the depth of its financial markets, access to sophisticated products, and the perception of greater institutional predictability continue to position the U.S. as the primary destination for Latin American offshore wealth.