How to reinvest Treasury Direct bonds, CDBs and other papers? End of the Selic rise poses challenges

The maturity of more than BRL 173 billion in inflation-linked government bonds (NTN-B 2022) earlier this week raised a question in the minds of investors: what to do with the amount that drips into the account when a Treasury Direct paper, Does a CDB or other fixed income applications expire?

The question is pertinent. After more than a year of rising rates, which made investments increasingly attractive, most financial agents believe that the cycle of monetary tightening is at an end and that at the next meeting, in September, the Monetary Policy Committee (Copom) will only maintain the Selic at 13.75% per year, according to Copom option contracts traded on B3. And there are already those who start drawing down scenarios from the second half of 2023.

The risk of reinvesting the amounts redeemed from another application – that is, the chance of not being able to obtain a remuneration equivalent to the previous one or in better conditions than the current ones – tends to be more exacerbated in periods of maintenance or a fall in the Selic, as explained Rodrigo Sgavioli, head of allocation and funds at XP.

“When a previously acquired bond expires, the interest and inflation path may be different. It may be that the profitability obtained in the portfolio is no longer possible and, therefore, the performance of the portfolio may decline”, warns Sgavioli.

Read more:
• Expiration of NTN-B 2022 moves R$ 173 billion; how much did the bond yield after the rate spike?

Bruna Centeno, economist and specialist in fixed income at Blue3, points out that short-term investments – bonds maturing at the end of this year or beginning of the next – will be the most affected. In this case, those who managed to invest at high rates – 14% or 15% a year months ago – will have to reinvest in a more diversified way to obtain good gains going forward, or accept to take a greater risk, including the stock market.

Reinvest in fixed or floating rates?

Considering that the cuts in the basic interest rate should start in the second half of next year and that the rates offered by fixed income securities remain high, the suggestion of some experts is to take advantage of the moment to try to “stop” good returns, since fixed income remuneration in general is still high.

“Even with the closing of the curve [recuo nos juros] seen in recent days, it is time to lock these rates to 12%, 13%, 14% per year, if in fact it is the end of the BC cycle”, observes Bruna, from Blue3. Although she likes the idea of ​​keeping fixed-rate securities in the portfolio, the specialist suggests doing this move carefully, prioritizing terms of two to three years in bonds that are offering from 12% per year.

This is because fixed-rate securities may suffer price fluctuations until maturity due to mark-to-market. When interest rates are falling, as will be the case from now on, the tendency is for old fixed rates, purchased at higher rates, to appreciate in value – which can benefit those who opt for this type of investment. However, if any weather causes further increases in interest rates in the meantime, they are more likely to lose value. And in this case, those who need to get rid of the papers in the middle of the way can have a loss.

Therefore, to avoid bumps and losses, Sgavioli, from XP, suggests that investors prefer floating-rate assets linked to the CDI (fixed income reference rate) or to the Selic in any reinvestment they wish to make – if the redemption objective for up to one year.

He explains that, if the investor gets a rate of 13% or 14% per year on a fixed rate paper, and considers the Income Tax (with rates ranging from 22.5% to 15%), the net return can approach much of what is offered in floating rates – which would not be advantageous, if the investor takes into account the additional risks to which he would be exposed.

In the view of Bruna, from Blue3, reinvestment in floating rate bonds should be done in those that deliver at least 112% to 114% of the CDI.

Survey made by InfoMoney with data from the Yubb platform – which compiles information on products offered at various brokerages – showed that the highest interest on fixed-rate CDBs maturing in two years was 14.5% per year this Thursday (18). For terms of three years, it reached 13.93% per year.

The first was a CDB offered by Banco BMG, while the second was issued by Banco Pine. Both returns do not take into account the Income Tax (IR) discount.

In the case of floating rate CDBs, it was possible to find securities that offered up to 117% of the CDI with a maturity of 12 months. The paper in question was issued by BRK Financeira.

Read more:
• Average CDB rate drops to 100% of CDI in several periods after Copom; highest return on fixed-rate is 14.34%

Allocations in fixed-rate government bonds can also be a good option, with preference for assets that mature in 2025, as explained by Cal Constantino, responsible for the fixed income area at Santander Asset.

He prefers the intermediate maturity because short-term fixed rate returns suffered a lot with the recent decline in the yield curve – when the market stopped pricing more aggressive increases for the Selic this year. Therefore, such papers have less attractive premiums (interest).

“We prefer to extend it, but it is not possible to extend it too much, because there is the fiscal issue and the economic policies of the presidential candidates on the radar, which have not yet been addressed much”, observes Constantino. According to him, the house is recommending fixed-rate papers, but that it is not with very aggressive bets because the scenario is one of caution.

According to the Santander specialist, the international environment has inspired more care than the local environment at the moment. He warns that the inflation indicators in the United States have positively surprised the market, but that they should not be celebrated because they still show a lot of inflationary pressures, especially in services. In addition, there is a very delicate issue involving natural gas in Europe. Bullish pressures on international curves can cause changes in Brazil, he points out.

With an eye on a troubled scenario, it is necessary to be aware that assets linked to inflation can also be affected by strong volatility, both on the positive and negative sides. The expectation that the IPCA (Brazil’s official inflation index) will once again register deflation (recoil in prices in the economy) in August is one of the warning factors.

Read more:
• Deflation: what happens to fixed income securities linked to the IPCA when the index turns negative?

“In the very short term, know that your security tends to have a negative yield, due to the deflation projected in the IPCA. However, this does not disqualify an allocation to inflation-linked assets, which should be taken to maturity”, evaluates Sgavioli, from XP.

In the opinion of the broker’s specialist, the ideal is to think of longer terms and diversify vertices and maturities when selecting an asset linked to inflation.

In the case of Tesouro Direto, Sgavioli’s preference is for papers maturing in 2026 and 2035, which have a better risk-return ratio and can be assets in the portfolio, in the midst of a scenario that still inspires care with the rise in prices .

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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