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Global markets recovered in May, reversing the decline seen in April. The easing of trade tensions between the United States, China and the European Union, with the reduction of tariffs and the delay of new protectionist measures, was the main catalyst. The total return in dollars of the S&P 500 was 6.3% and the Nasdaq, 9.6%, while in emerging markets (MSCI EM) it was 4.3% and 1.7% in Latin America (MSCI Latin). In the fixed income market, the Trump administration's proposal for a new potentially expansionary fiscal package raised concerns about the U.S. fiscal trajectory and the consequent impact on Treasuries, with the 10-year bond opening 24 bps and ending the month at 4.40%. The recent volatility of the American market combined with the potential change in the dollar's valuation trend has benefited the flow of capital to emerging markets. In this context, the flow of foreigners in B3 in the year was R$22.1 billion (R$ 11.6 billion in May), which, in our opinion, has supported the performance of the variable income market in Brazil (Ibovespa + 13.9% in the year). In Brazil, the main topics of the month were macroeconomic, among which we highlight: (i) Copom raised the Selic rate by 50bps to 14.75%, however, the more domestic tone led the market to price the end of the monetary tightening cycle, a fact that triggered strong stock performance on the stock market and played an important role in the alpha generation of our funds; (ii) IPCA-15 below consensus (0.36 m/m vs. 0.44% consensus), contributing to the prospect of the end of the monetary tightening cycle, and: (iii) announcement of changes in the IOF, a topic that is still evolving and which highlights the current challenge of fiscal balance, especially from the perspective of increasing taxation. The 10-year bond yielded 5bps for the month and ended at 14.02% (once again, the final figure for the month does not capture the intra-month volatility in which the yield fluctuated between 13.85% and 14.20%). We continue to believe in the importance of maintaining a portfolio focused on quality companies, with low leverage and resilience to the macroeconomic scenario. During the month, we continued to reduce exposure relative to the low-income utilities and construction sectors, and increased participation in domestic consumer companies. We continue to look out for opportunities in micro-specific stories.

April was marked by strong volatility in global financial markets, driven by the announcement of trade tariffs by the United States. “Liberation Day” introduced a universal 10% tariff, in addition to additional surcharges aimed at countries with which the United States has a trade deficit - resulting, in the most extreme case, in initial rates of 67% for China, which reached 145% in the last update. The end game is still uncertain, but higher rates and lower visibility for investments should negatively impact global activity. The S&P 500 ended the month with a drop of 0.68%, after falling to 11.2% at the worst moment in April, accumulating a devaluation of 5.3% in the year. The Nasdaq rose 0.88% in the month, after falling 11.7% during the period of increased risk aversion, but still accumulates a negative return of 10.3% in 2025. On the other hand, gold appreciated 5.8% in the month, benefiting from increased risk aversion and fears of stagflation. The Trump administration's initial proposals, focusing on twin deficits, significantly impacted the debt market and the dollar. The DXY index fell 4.6% in April, accumulating a devaluation of 8.01% in the year. 10-year treasury interest rates, on the other hand, ended the month practically stable, at 4.17% (down 4 bps), although they fluctuated between 4% and 4.5% over the period - a volatility that is not captured by the month-end data. The devaluation of the dollar and the easing of long interest rates favored capital flows to emerging markets. In Brazil, the Ibovespa increased 3.7% in April (4.4% in USD), ending the month at 135,000 points and accumulating an increase of 12.3% in the year. The real appreciated 0.57% against the dollar, in line with the performance of emerging currencies. As expected, Brazil, as a relatively more closed economy, performed better than other regions in the context of tariffs, being subject to the base rate of 10%. The domestic interest curve closed significantly, with 10-year bonds falling ~100 bps and ending the month with a yield of 14.06%. Market expectations regarding the monetary tightening cycle also adjusted: at the end of March, the curve indicated Selic at 15.2% in July 2025; already at the end of April, it expected the end of the tightening in June, with the rate at 14.7%. This repricing at the short and long vertices of the curve contributed positively to the performance of domestic equities, mainly benefiting our allocation to the utilities sector — currently our main sector exposure. We continue to believe in the importance of maintaining a portfolio concentrated on quality companies, with low leverage and resilience to the macroeconomic scenario. During the month, we marginally reduced exposure relative to the low-income utilities and construction sectors, and increased participation in domestic consumer companies. We remain attentive to opportunities in micro-specific stories.

Growing uncertainty about U.S. trade and tariff policy and its potential impacts on the economy continued to affect markets in March. Portfolio rotation continued to favor assets in emerging countries, including Brazil, in exchange for the American stock market. The Ibovespa rose 5.9% in the month (and 8.3% in the year), while the S&P fell 4.1% (-4.6% accumulated in 2025). Brazil, being a relatively closed economy, should suffer little impact from Trump's expected announcement of reciprocal tariffs, scheduled for early April. In addition, we have observed an increase in interest in Brazil among foreign investors, resulting in a positive flow to the stock market for the fourth consecutive month. Still in the international field, it is important to mention that the American Central Bank kept the interest rate stable for the second consecutive meeting, citing uncertainties about the economic outlook. The short-term inflation data met market expectations, while the economic activity indicators remained resilient. If, on the one hand, we see a more favorable international scenario for emerging market assets and for the Brazilian stock market, at the domestic level, we see a government without commitment to an austere fiscal policy and concerned about the decline in popularity, according to recent research. As a result, domestic long interest rates remain at high levels, despite the approach of the end of the monetary tightening cycle. The market projects two additional increases of 50 bps by June, resulting in a Selic terminal of 15.25%. The main factors supporting this scenario are a more stable exchange rate (with an appreciation of 8% in the year) and the expected slowdown in the economy. However, the economic stimulus measures that the government intends to announce in the coming months may hinder the disinflation process. As an example, payroll loans for private sector employees were launched this month, with the potential to lower personal credit rates and boost consumption. We believe that it is still essential to maintain a portfolio focused on quality companies, resilient to the economic scenario and with low leverage. We kept our positions focused on utilities, low-income construction companies and sought opportunities in specific micro stories.

The global scenario continued as the main driver of the markets, with an increase in volatility after new statements by Trump indicated a possible tightening of US trade policy and increased concerns about the slowdown in the American economy. In Brazil, attention was focused on government approval polls, which showed a further deterioration in the president's popularity and raised speculations about when investors will stop focusing on current economic policy to start pricing the possibility of an opposition government in the 2022 elections. In this context, the American S&P 500 index fell 4.3% in the month, while the Brazilian market performed mixed, with the Ibovespa closing close to stability (+0.3%) and the real showing a slight devaluation (-1.2%). Highlight is the Chinese stock market index, which rose 8.7% in the month, driven by the expectation of new economic stimulus. It is still difficult to predict the impact of the Trump administration's new policies on the American economy: increased tariffs on trading partners, a policy of fiscal austerity with the creation of the so-called “Department of Government Efficiency” (DOGE) and tax reduction. The intensification of protectionist rhetoric has generated concern among investors, especially in emerging markets that are more dependent on global trade. In Brazil, the month was marked by a further decline in the government's approval rate, with polls showing an increase in population dissatisfaction, even in regions where the left historically maintained favouritism. This worsening in popularity led the government to adopt a more aggressive discourse regarding economic stimulus measures, rekindling concerns about the commitment to fiscal balance. At the corporate level, Petrobras reported its quarterly results with higher-than-expected capex, which resulted in a lower distribution of dividends in the period. In addition, shares of companies in the retail sector performed negatively after reporting results below investor expectations. Faced with this scenario, we maintain a defensive position in the portfolio, betting on sectors that are less sensitive to the economic cycle and with low leverage. Our main positions remain focused on low-income utilities, banks and construction companies, sectors that we believe offer a more balanced combination of resilience and valuation potential in the medium term.