Double-digit interest increases the attractiveness of Treasury Direct, say experts

The opportunity for gains with the return of the Selic rate to the double-digit level, confirmed by the Central Bank last week, sharpens investors’ appetite for fixed income investments.

Among the opportunities that this asset class offers, the one with the lowest risk, and with very attractive rates of return, in the opinion of experts, is that of government bonds.

These papers are nothing more than debt issued by the government through the National Treasury, which offer a rate of return to attract investors and which can be traded through the Tesouro Direto digital platform.

There are three main options for securities that can be purchased through the digital platform: Prefixed Treasury papers, which offer investors a pre-established nominal interest rate; IPCA Treasury papers, in which there is a pre-established rate, plus the variation of the official inflation index; and the Treasury Selic, which closely monitors the basic interest rate yield.

According to Orlando Bachesque, advisor to the Alta Vista Investimentos office, the rates of return on public bonds have been on an upward trajectory since the middle of last year, either due to the increase in the Selic rate itself or due to uncertainties related to the economy and politics of the country in 2022, which make investors charge more to lend their money to the government.

On Friday (4), Fixed-rate Treasury bonds maturing in 2024, for example, had a nominal rate of return of 11.28% per year. In the case of IPCA treasury papers for 2030, the real interest rate, that is, above inflation, was 5.38% per year.

Investment market experts point out that, given the level of rates that have been practiced lately, there are some good opportunities to be captured by investors in government bonds at this time.

What will define the best of the alternatives will be the risk profile and investment horizon of each one, says Mauro Morelli, strategist at Davos Investimentos.

For that portion of resources that must be kept as a kind of liquidity cushion, which needs to be available quickly in case of any emergency, the best options, says the strategist, are Treasury Selic papers. Especially now, with the interest rate back in the double digits and with the prospect that it will rise even more, says Morelli.

As for that money that can be invested for a little longer, the Davos strategist says that he welcomes the rates of return offered by IPCA Treasury papers, especially those with medium-term maturities, between 2026 and 2035.

“There was an important increase in real interest in 2021, which should continue this year, although most of the movement has already occurred. In this sense, assets linked to the IPCA can be attractive to investors with a medium-term focus”, says Morelli.

Although the majority expectation of the market pointed out by the Focus report is of a significant deceleration of inflation ahead, he recalls that, in a year full of uncertainties, in Brazil and abroad, it is not possible to rule out that prices are still pressured by some more time.

The strategist also adds that, in the case of fixed-rate securities, despite the fact that rates are in the double digits, it is possible that this remuneration offered by the papers will rise even more in the short term, following the new increase foreseen for the rate Selic

“Of the three options in Treasury Direct, the prefixed ones are the ones I least like currently”, says the Davos strategist, who also says that these papers should become a more attractive alternative when the monetary tightening cycle is over.

Head of fixed income analysis at XP, Camilla Dolle says that, for those interested in investing in Treasury Direct bonds, it is important to remember that, as interest rates rise, the profitability of the papers that are already in the investor’s portfolio tends to go negative.

This is due to an effect known by financial agents as mark-to-market, which is when the security that was previously acquired at a lower rate starts to offer a higher rate due to market conditions.

Camila says that, in 2021, the Treasury paper IPCA 2045 recorded a negative return of 25.4%, in a tune that continued in 2022 – in January, the title fell by 4.04%. The XP expert points out that the longer the title, the more volatile its behavior.

However, she adds that these losses will only actually be realized if the investor redeems the security before the deadline. If the paper is carried to maturity, the return delivered, he says, will be exactly what was agreed upon at the time of purchase.

“It is important that people are aware of these fluctuations, which should continue to occur in this year of elections and a more uncertain external scenario, even so that they can protect themselves. XP.

She considers the IPCA Treasury papers maturing in 2030, which on Friday were traded at a real interest rate of 5.38%, with a good risk-return ratio.

“It’s not such a long term and, as a result, the investor is subject to lower volatility compared to longer-term bonds.”

“Volatility should continue to be present in the market, but perhaps in a not so significant magnitude. Also because, it is necessary to remember, last year the Selic went from 2% to 9.25%.

And the expectation for this year is a much lower intensity increase”, says Bachesque, from Alta Vista.

In the Focus report, projections indicate a Selic rate of 11.75% in December, which includes another one percentage point increase, after Wednesday’s decision that took the basic interest rate back to double digits, to 10.75 % per year.

“For longer-term bonds, I also prefer those indexed to the IPCA, which give investors the comfort of protection against the risk of inflation remaining high”, says the advisor.