High interest rates punish Treasury Direct, but opens up an investment opportunity

The increase in future interest rates in November, given the uncertainties about the economic policy of the next government, affected investments in government bonds. There was devaluation, especially in fixed-rate or inflation-linked securities with longer maturities.

This movement has already begun to reverse over the course of the month, and analysts expect this to be an investment opportunity for those who are betting on an improvement in the market at the beginning of the next term.

The indicator that best represents the portfolio of public securities that make up the Brazilian debt, the IMA (Anbima Market Index), dropped 0.06% last month, reducing the appreciation in 12 months to 8.82%.

The indices accompanying fixed-rate securities over one year (IRF-M 1+) and inflation-linked securities maturing over five years (IMA-B 5+) had losses of 1.42% and 1.18% in the month, respectively. During the first half of the month, the loss was around 3%. The biggest devaluations were with Treasury IPCA 2045 (-6.05%) and Fixed Treasury 2029 (-4.76%).

The IMA-S index, which tracks the behavior of securities indexed by the basic interest rate (Selic), on the other hand, rose by 1% last month.

In fixed-rate and inflation-linked securities, whenever interest rates rise, the security is sold or repurchased by the National Treasury at a lower price.

This does not mean that the investor necessarily lost money. Those who carry the bond to maturity receive the amount corrected by the rate at the time of purchase. Those who sell before are subject to greater gains or losses, due to market fluctuations.

Last Friday (2nd), for example, the Prefixed Treasury 2029 was sold for BRL 485, guaranteeing an annual return of 12.68% for the person who will receive BRL 1,000 at maturity. In early November, the stock was worth R$505, which represented 11.77% per year return. On November 11, the price reached BRL 466.

The day before, the financial market reflected investors’ dissatisfaction with the criticisms made by the president-elect, Luiz Inácio Lula da Silva (PT), to rules that limit public spending. The dollar had the biggest daily high since the beginning of the pandemic. The Ibovespa fell 3.35%. Much of this reaction has already been reversed.

Treasury IPCA 2045, for example, started the month of November with interest of 5.89% per annum above inflation. The rate reached a peak of 6.40% + IPCA on the 11th. With the improvement in the mood of the market in the following weeks, the stock ended the month with a real interest rate of 6.14%.

The director of Somma Investimentos Joaquim Kokudai recalls that the interest curve came to price new increases in the basic rate in 2023, but says he believes that the Central Bank will not have to raise interest rates.

He assesses that the new government should maintain a certain fiscal discipline and, based on this premise, the tendency is for interest rates on bonds to fall in the coming months, favoring those who enter this market —or others with higher risk assets— in the moment of greatest stress.

Kokudai claims that the basic rate is already at a very high level and that inflation has been cooling down, in a scenario of slowing economic activity.

“The heel is the fiscal issue. Those who have a more pessimistic view have to be more careful. If the view is that there will really be a certain fiscal discipline, the level, both for prefixed and indexed to the IPCA, is very attractive ” says Kokudai.

Danilo Gato, financial educator and investment specialist certified by Anbima, says that the moment is favorable to investments in post-fixed securities or CDBs for investors who do not want to take risks and seek to guarantee liquidity and good remuneration.

For those who want to take a little more risk, securities maturing in up to three years are an option, especially if the assessment is that the market is pricing the yield curve in an exaggerated manner and that rates tend to fall with a definition of the fiscal issue in the next government.

If the investor really wants to make a long-term investment, he should look for bonds indexed to the IPCA, to guarantee a gain above inflation.

“The market often tends to price [os juros] with exaggeration. When things start to settle down, it tends to settle down. People are very afraid of the government defaulting on the debt, but we are far from that scenario. Government bonds continue to be very safe,” he says.

Cristiano Corrêa, coordinator of the Administration course at Ibmec SP, says that changes in government bring natural volatility and that the market tends to stabilize when there is a definition on the names of the future economic team.

He claims that government bonds are the safest investment that exists and that it is possible to earn with the expectation of an improvement in the market’s mood. Corrêa recommends dividing the investment into pre- and post-fixed.

“Moments of high volatility and uncertainty bring great opportunities. After a decision on the economic team, we tend to have a stabilization in future interest rates”, says Corrêa.