Individual Investors 2022

São Paulo, March 15, 2023 – Diversification has proven to be an important growth vector for the Brazilian capital market. A sectoral overview of individual investment data at B3 in 2022 shows a steep increase in agribusiness linked products in terms of number of investors and volume invested. These figures grew 95% and 79%, respectively, reaching 1.6 million investors and BRL 411 billion in resources, distributed among Agribusiness Credit Bills (LCAs), Agribusiness Receivables Certificates (CRAs) and Agribusiness Investment Funds (FIAGRO).

This volume in custody represents 19.5% of everything invested in fixed income (BRL 1.6 trillion) and equities (BRL 459 billion) together. The share of this total at the end of 2022 was 14%. The median amount in the sector per investor was BRL 51,700.

FIAGROs, which began to be traded at B3 in August 2021, to increase the range of products linked to agribusiness, had more than BRL 5.2 billion in inventories in December, considering the 33 traded funds.

In practice, FIAGROs operate in similar way to real estate funds, but focusing on the development of Brazilian agricultural activity, with shares traded in accessible values, starting around BRL 100.

In the real estate sector, which reached more than 3.2 million investors, the invested volume reached BRL 380 billion, a 46% increase compared with the end of 2021. Real estate funds encompass 51%. The numbers also include FII ETFs, Real Estate Letters of Credit (LCIs) and Real Estate Receivables Certificates (CRIs).

FIIs invest shareholders’ money in enterprises involving real estate or in fixed income securities that have real estate as their underlying, such as Real Estate Receivables Certificates (CRIs) and Real Estate Letters of Credit (LCIs). When acquiring the shares of an FII, for example, the investor becomes the part owner of the fund, which for its part owns real estate (or assets that have real estate as underlying). The acquired real estate is leased out by the fund and the financial result is divided among all the shareholders, with the payment of dividends.

“This sectoral overview is important as it shows that private investments, by small investors, are significantly helping to boost important segments of our economy, while generating revenue for investors. The capital market logic is exactly that of bringing private capital to the productive sector and we can see this gaining ground ever more in Brazil, giving a chance for individual investors to become part of this cycle,” said Felipe Paiva, Director of Customer Relationship - Individual Investors at B3.

The sectoral overview is a new development in the most recent edition of the study, which analyses the evolution of individual investors at B3 and was published this Wednesday (March 15). Below are the other main points of the study.

Fixed income reaches BRL 1.6 trillion, with bank funding the highlight

Individual investors’ fixed income in custody reached BRL 1.6 trillion at the end of 2022, 44% more than a year before. The number of investors grew 34%, reaching 14.8 million. Of these, 13.8 million are in bank funding products, such as Bank Certificates of Deposit (CBD), Bank Deposit Receipts(RDB), LCAs and LCIs, which totaled BRL 1.3 trillion in investments.

Five million individuals at the exchange

In 2022, the number of individual investors in equities reached 5 million, 19% more than in 2021. The value in custody, which is the value of individual investors at the exchange, fell 8% to BRL 459 billion from BRL 500 billion.

All the products – shares, real estate funds, ETFs and BDRs – had a larger number of investors, but there was only increased revenue (+11%) in the case of real estate funds. In the case of the other products, there was a smaller volume invested compared to 2021. The number of accounts reached 5.8 million in December, with a single investor able to have an account with more than one brokerage house.

Even against a background of high interest rates, there was a positive balance of more than 408,000 new investors in December, also considering those that debuted via a BDR offering held in November 2021 with large adhesion by individual investors.

Of the more than 5 million investors at the exchange currently, 84% joined as of 2019 and more than half (53%) joined in the last two years.

Lower values invested demonstrates broad access to the exchange

In terms of values invested, meanwhile, investors that joined as of 2019 had 27% of the volume in custody. The largest volume is in the hands of investors who debuted in equity up to 2015 and maintained their investments until today, benefitting from the long-term effect.

Of the 408,000 investors who made their first investment in December 2022, 92% invested up to BRL 200.

“The figures ratify and reinforce the idea that the exchange and the capital market are for everyone and that individuals are seeking to experiment and diversify their assets,” said Paiva.

Diversification was evidenced in the composition of individual investors’ portfolios. In 2016, 75% of investors in equity only held shares, a figure that now stands at 30%. Those combining shares and FIIs represent 26% and those with shares and BDRs represent 6%.

The North of Brazil is the proportional growth highlight

Brazil’s North is the region that most grew, in percentage terms, in number of investors in equity and in Tesouro Direto as of 2018, by 1,363% and 253%, respectively. In absolute numbers, however, this is the region with the least investors. Brazil’s Northeast, meanwhile, came in second place in terms of growth, followed by the South. The Southeast continues to concentrate the largest number of investors, with 2.8 million in products at the exchange and 1.3 million in Tesouro Direto.

Tesouro Direto gains 2 million investors in a decade

The number of Tesouro Direto bonds grew to 2.1 million from 100,000 over the past ten years. The Brazilian Treasury program that allows the sale of government bonds to individual investors was launched in 2002 in partnership with B3.

In 2022 the average amount invested by each individual rose to BRL 2,800 from BRL 2,100.