Several major asset managers, including VanEck, Vontobel and Aberdeen, are reducing their exposure to Brazil amid uncertainty ahead of the October 2026 presidential election. All three firms are avoiding or trimming positions in Brazilian fixed-income assets and the real, citing rising election risks and insufficient downside cushion. The real has underperformed relative to other emerging market currencies, while implied volatility is rising across equities, bonds and currency markets. Incumbent President Lula still leads challenger Bolsonaro in the polls, but his margin is narrowing.
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