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Asset Management

EQUITY

(Equity Hedge, starting on 02.28.23; Equity Hedge Plus, starting on 11.19.25; and Total Return under the new mandate, starting on 07.01.24)

The Springs Equity Hedge FIC FIM (Long Short) returned +1.07% (vs. CDI of 1.09%), accumulating a year-to-date return of +4.86% (vs. CDI of 4.54%), and +49.54% since inception (vs. CDI of 46.78% over the same period). The fund has an annualized volatility of 4.03%.
Springs Equity Hedge PLUS FIF Cotas FIM (Leveraged Long Short) returned 1.12% (vs. CDI of 1.09%), accumulating a year-to-date return of +4.53% (vs. CDI of 4.54%), and +9.44% since inception (vs. CDI of 6.28% over the same period). The fund has an annualized volatility of 6.54%.

The Springs Total Return FIC FIM (Long Biased) returned -1.47% (vs. IPCA + IMAB Yield of 1.26%), accumulating a year-to-date return of +2.37% (vs. Benchmark of +5.12%), and +31.84% since the new mandate began (vs. IPCA + IMAB Yield of 24.81% over the same period). The fund has an annualized volatility, under the new mandate, of 13.42%.

Monthly Commentary

April was marked by a significant recovery in global markets, following the risk aversion observed in March. In the United States, solid corporate earnings and some relief in oil prices offset some geopolitical concerns, leading the S&P 500 to rise 10.4% for the month, its best monthly performance since 2020, while the Nasdaq advanced 15.3%, driven primarily by the technology and semiconductor sectors.

In emerging markets, the trend was also positive, with a resumption of flows into the asset class and a highlight on Latin America. The global environment once again favored risk assets, benefiting markets that were still trading at discounted valuations and had greater sensitivity to falling global interest rates.

In Brazil, the Ibovespa had a more sideways month, ending April with a slight decline of 0.08%, despite reaching new historical highs during the period. The dollar fell 4.38% for the month, closing April at R$4.95, reinforcing the relative attractiveness of Brazilian assets for foreign investors. Despite the index's more neutral performance, the Brazilian stock market continues to accumulate strong gains year-to-date, primarily supported by foreign inflows, the expectation of a continued interest rate cutting cycle, and still attractive valuations in historical terms.

In the short term, we understand that the main drivers of the Brazilian stock market remain the combination of foreign inflows, interest rate trajectory, and the evolution of the fiscal and electoral landscape. After the significant repricing observed since the beginning of the year, the environment now demands greater selectivity, especially in a still volatile external context.

Given this scenario, we continue with a diversified long-short portfolio, maintaining utilities as the primary gross exposure, but reducing the total gross exposure of the portfolio during April. Throughout the month, we reduced exposure to domestic consumption and financial institutions, increased allocation to commodities/metals, and maintained significant arbitrage and relative value structures. This composition aims to preserve flexibility, capture dispersion between assets, and maintain risk discipline, without relying on a significant increase in net exposure.

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Equity

‍(Long Short, starting on 02.28.23; and Total Return under the new mandate, starting on 07.01.24)

The Springs Equity Hedge FIC FIM (Long Short) returned +1.78% (vs. CDI of 1.05%), accumulating a year-to-date return of +19.10% (vs. CDI of 12.95%), and +39.87% since inception (vs. CDI of 38.71% over the same period). The fund has an annualized volatility of 4.03%.

The Springs Total Return FIC FIM (Long Biased) returned +4.35% (vs. IPCA + IMAB Yield of 0.70%), accumulating a year-to-date return of +26.77% (vs. IPCA + IMAB Yield of 11.42%), and +26.74% since the new mandate began (07.01.24) (vs. IPCA + IMAB Yield of 17.55% over the same period). The fund has an annualized volatility of 12.59% under the new mandate.

November was a month of consolidation in global markets, with the MSCI ACWI virtually flat (-0.1% in USD) and strong sectoral dispersion. In the US, the S&P 500 advanced 0.1% and the Nasdaq declined 1.6%, amid price corrections for technology companies and discussions about the pace of monetary easing. The 10-year yield closed near 4bps, while Fed statements led the market to price in a higher probability of interest rate cuts in December.
In emerging markets, the MSCI EM fell by approximately 2.5%, pressured by Asia. Meanwhile, in Latin America, Brazil broadly led the region, with the Ibovespa up +6.4% in BRL for the month (+32.3% year-to-date; +53.5% in USD). The advance was supported by strong corporate earnings and the compression of the interest rate curve. Cyclical domestic sectors, especially construction and retail, saw the largest gains.
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Brazilian inflation maintained a favorable trajectory: the November IPCA-15 rose 0.20% (4.5% over 12 months), reinforcing the perception of high real interest rates and anticipating bets on Selic rate cuts in 2026. The DI curve significantly narrowed, benefiting interest-rate-sensitive domestic assets. The real appreciated against the dollar during the period, moving to the R$ 5.33 range, tracking a weaker dollar globally.
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We understand the US monetary cycle, currently in an easing process, and the expected start of the Brazilian cycle (currently priced between January and March 2026), as the biggest drivers of the domestic market over the next 6 to 12 months. The fund's strategy remained focused on quality companies with strong cash generation and low leverage.

Equity Hedge

‍‍During the month, the fund returned 1.78%. From a sectoral perspective, the utilities, agribusiness, and healthcare sectors performed positively. On the other hand, the steel, mining, and civil construction sectors were the main detractors. The largest portfolio allocations are in the consumer, utilities, and technology sectors.

Total Return

‍‍During the month, the fund returned 4.35%. From a sectoral perspective, the agribusiness, utilities, and banking sectors performed positively. On the other hand, the civil construction sector was the main detractor. The largest portfolio allocations are in the banking, utilities, and consumer sectors.

Equity Hedge

‍October continued to show a positive trend for global assets. The S&P 500 posted a total return of 2.34%, while the Nasdaq returned 4.72%, reflecting a positive earnings season and expectations for continued monetary easing in the US. The yield on the 10-year US Treasury bond closed down 7 bps, ending the month at 4.08%. In emerging markets, positive performance was equally significant. The MSCI EM rose 4.19%, benefiting from continued capital inflows, a trend expected during periods of dollar weakening. The Ibovespa followed the global trend and closed the month at an all-time high, up 2.26%, supported by the steel and mining, banking, and capital goods sectors. We view the US monetary cycle, currently in an easing phase, and the anticipated start of the Brazilian cycle (currently priced between January and March 2026) as the main drivers for the domestic market over the next 6 to 12 months. Historically, periods of US interest rate cuts are accompanied by a weaker dollar and investment flows into higher-risk assets. In October, foreign equity flows were negative by R$1.4 billion, despite a reversal during the last week of the month when they turned positive by R$5.9 billion. For 2025, the cumulative flow stands at R$25.1 billion. During the month, the fund performed at 0.96%. From a sectoral perspective, the Banking, Infrastructure, and Utilities sectors performed positively. On the other hand, the Real Estate sector was the main detractor. The fund's strategy remained focused on quality companies with strong cash generation and low leverage, in addition to specific opportunities in unlisted names with appreciation potential. The largest portfolio allocations are in the Utilities, Consumer, and Banking sectors.

‍Total return

‍October continued to show a positive trend for global assets. The S&P 500 posted a total return of 2.34%, while the Nasdaq returned 4.72%, reflecting a positive earnings season and expectations for continued monetary easing in the US. The yield on the 10-year US Treasury bond closed down 7 bps, ending the month at 4.08%. In emerging markets, positive performance was equally significant. The MSCI EM rose 4.19%, benefiting from continued capital inflows, a trend expected during periods of dollar weakening. The Ibovespa followed the global trend and closed the month at an all-time high, up 2.26%, supported by the steel and mining, banking, and capital goods sectors. We view the US monetary cycle, currently in an easing phase, and the anticipated start of the Brazilian cycle (currently priced between January and March 2026) as the main drivers for the domestic market over the next 6 to 12 months. Historically, periods of US interest rate cuts are accompanied by a weaker dollar and investment flows into higher-risk assets. In October, foreign equity flows were negative by R$1.4 billion, despite a reversal during the last week of the month when they turned positive by R$5.9 billion. For 2025, the cumulative flow stands at R$25.1 billion. During the month, the fund performed at 1.49%. From a sectoral perspective, the Metals, Utilities, and Banking sectors performed positively. On the other hand, the Real Estate sector was the main detractor. The fund's strategy remained focused on quality companies with strong cash generation and low leverage, in addition to specific opportunities in unlisted names with appreciation potential. The largest portfolio allocations are in the Utilities, Consumer, and Banking sectors.