Fund buyers have said Brazil still presents an attractive opportunity for investors, despite recent political turmoil threatening to derail its recovery.
Fixed income
In the fixed income space, Jan Dehn, head of research at emerging markets specialist Ashmore, said political noise causes market over-reactions.
"In short, we think the market has priced in too much fear. Very few such events have a meaningful impact on the riskiness of investing in public debt and past bouts of political volatility have been excellent buying opportunities.
"We think Brazil continues to offer a compelling fixed income proposition, now with an even more attractive entry point."
Temer became President last summer after the impeachment of Dilma Rousseff for manipulating the budget.
His market-friendly reforms, as well as a turnaround for commodities, helped Brazil become one of the best-performing markets in 2016 with the MSCI Brazil index up 66%; a significant turnaround from a 41% drop in 2015 (in sterling terms).
Rory McPherson, head of investment strategy at Psigma Investment Management, said that while the recent market correction was significant, it was not enough to tempt him back into the country on the equity side due, to significant outperformance last year.
He said: "We are fairly light on Brazil. In terms of emerging markets, we like Asia and we do not have any Brazilian equities.
"We feel we have missed the boat on Brazil as the market was up around 100% from last year so this is just a small pull-back."
