Bank reaches zero rate to attract investors in Eletrobras’ offer; see options

The Eletrobras share offering, within the scope of the electric energy company’s privatization process, should move a volume of up to BRL 35 billion, of which approximately BRL 6 billion will be reserved for retail investors wishing to allocate part of the funds held in the FGTS (Fundo de Garantia do Tempo de Serviço) in the operation.

There are already more than 20 funds on the market structured by banks and brokerage firms to receive funds from investors interested in allocating part of the FGTS funds to the company’s share offering.

There are two different models of products offered to investors: the FMP (Mutual Privatization Funds) FGTS Eletrobras, for those who want to join the process, and the FMP FGTS Migração, intended for those who want to migrate the resources allocated in the funds created at the beginning of the 2000 with shares from Petrobras and Vale.

“As the funds’ portfolios will be the same, basically composed of 95% of Eletrobras’ common shares, with the remainder in short-term government bonds, the management fee charged by each institution will be largely responsible for differentiating the final return obtained by the investor “, explains Paula Sauer, professor of economics at ESPM and CFP financial planner.

The competition in the market to attract money from workers interested in participating in the offer has caused many houses to reduce the administration fees charged for the products in recent days.

Management fees range from zero to 0.8% per year

The most emblematic case is that of Banco Daycoval, which initially structured the Daycoval Eletrobras FMP FGTS fund with a management fee of 1.5% per year, but chose to bring the rate to zero this week.

“We have very positive expectations regarding the adhesion of investors to this fund and the option to maintain the zero administration fee is to focus on business with our customers, passing on, in this offer, all the gain from the privatization of Eletrobras to them”, he said. Roberto Kropp, director of Daycoval Asset Management, in a note.

There are also cases like XP, which lowered the fees charged by XP Eletrobras FMP FGTS and XP Migração Eletrobras FMP FGTS from 0.50% to 0.20%, while Safra reduced from 0.50% to 0.15% the collection of Safra Eletrobras FMP FGTS.

BB (Banco do Brasil) and BNB (Banco do Nordeste) reduced rates from 0.50% and 0.45%, respectively, to 0.20% per year.

Check below the list of funds structured to receive contributions from workers with FGTS resources and administration fees, with data updated until June 1st.

Investors must select their preferred administrator as of Friday (3)

According to Caixa Econômica Federal manual, the worker who chooses to use FGTS money must choose an administrator to apply the resource. In this case, the company will intermediate the operation and will need to have access to the registration and financial information of the account linked to the fund, related to amounts available for investment.

Through the FGTS application, the worker can consult the balance available for application, authorize the administrator to consult the balance and request the reserve/debit of part of the balance of his FGTS account for investment in a Mutual Privatization Fund.

Eletrobras begins next Friday (3) the process for the sale of its shares. Workers will be able to use FGTS money to invest in state-owned shares, making the reservation between June 3 and 8.

The worker will have reserved a minimum amount of R$ 5,000 to use his FGTS, according to the statement released by Eletrobras on Friday (27). The limit is BRL 50,000 and you can use up to 50% of the balance in the fund.