Brazil's Largest Asset Manager Recommends Up to 3% Portfolio Allocation to Bitcoin for Diversification and FX Hedge
Itaú Asset Management, Brazil's largest asset manager, has recommended that Brazilian investors allocate between 1% and 3% of their investment portfolios to bitcoin. This guidance aims to provide diversification benefits and serve as a partial hedge against foreign exchange depreciation and global market shocks.
The recommendation comes from Renato Eid, head of beta strategies and responsible investment at Itaú, who emphasized a disciplined, long-term approach rather than market timing. Bitcoin's relatively low correlation with traditional Brazilian assets underpins its role as a complementary portfolio component rather than a core holding.
This approach aligns with similar recommendations by other major asset managers: Bank of America allows wealth advisors to suggest up to a 4% bitcoin allocation, while BlackRock advocates around 2%. At the time of the note, bitcoin was priced approximately at $90,080.37, having peaked near $125,000 earlier in the year.
Itau noted that Brazilian bitcoin-related products like BITI11 experienced impacts from the weakening Brazilian real, whereas bitcoin’s global nature provided some insulation during periods of market stress. The prescribed allocation of 1-3% of total portfolio is intended for long-term horizons, with advice against reactionary short-term moves due to market volatility.
