Brazil is holding an election — and for the stock market, there’s more to gain than to lose, says fund manager

Brazil's presidential election is drawing investor attention, and one emerging-market fund manager argues the stock market has more upside than downside from the outcome. The key catalyst, according to the manager, is whether Flavio Bolsonaro performs better than current polling suggests on Sunday. If that happens, the manager sees the potential for a sharp rally in Brazilian equities.

The logic rests on how markets price political risk. When polls point one way but results diverge, assets tied to the perceived winner can reprice quickly. For Brazilian stocks, a stronger-than-expected showing by Bolsonaro would likely be read as a signal about the direction of economic policy, fiscal discipline, and reform momentum — themes foreign and domestic investors have watched closely in recent years.

What to watch: the actual results versus pre-election polling, the reaction in the currency and benchmark equity index, and whether any initial move holds or fades as the political picture becomes clearer. Election-driven rallies can be volatile, and the manager's view is one perspective among many. Investors should weigh it against broader fundamentals.