Duquesne Family Office, the investment vehicle associated with billionaire investor Stanley Druckenmiller, established a sizeable position in Brazilian equities at the end of 2023. Regulatory filings show the firm bought roughly 3.5 million shares of the $9.1 billion iShares MSCI Brazil ETF during the fourth quarter of 2023, and also purchased call options on the fund.
The timing preceded a pronounced rebound in January, when the ETF climbed about 17% - its strongest monthly performance since 2020. Market participants attributed much of the rally to a weakening U.S. dollar and rising commodity prices, which supported gains in large Brazilian companies. Miner Vale SA and oil producer Petroleo Brasileiro SA each posted double-digit increases during the month, reflecting those broader price trends.
Market activity in 2024 has been concentrated in the most heavily traded Brazilian names, many of which are commonly held by foreign investors. This concentration has amplified moves in the benchmark ETF and individual large-cap stocks, while overall market sentiment has been bolstered by expectations that interest rate cuts will begin next month in Latin America’s largest economy.
The surge in Brazil forms part of a wider upswing in emerging markets, where investors have been allocating fresh capital. According to the filings and market commentary, improving economic fundamentals in some emerging market economies, together with investor desire to diversify after prolonged heavy exposure to the U.S. market, are supporting flows into the asset class.
Stanley Druckenmiller is a veteran hedge fund manager who previously worked with George Soros. He founded Duquesne Capital in 1981 and later chose to close the fund voluntarily in August 2010, after overseeing more than $12 billion in assets.
Context and implications
The reported purchases - both the substantial equity allocation in the iShares MSCI Brazil ETF and the accompanying call options - indicate a directional bet on Brazilian equities and on continued favorable market conditions. The ETF’s strong January return underscores how currency moves and commodity cycles can quickly reshape returns in commodity-sensitive emerging markets.
While the filings provide a clear snapshot of Duquesne’s positioning at the end of 2023, they do not disclose future trading intent or the timing of any potential exits. Investors should note that the rally was concentrated in highly liquid stocks often favored by non-domestic investors, which can lead to pronounced volatility if sentiment shifts.