O first quarter The year was marked by numerous uncertainties, both from a political, economic and, of course, pandemic point of view. So, most Treasury Direct securities showed a negative result in the period, with falls reaching 14.15%, as was the case of the IPCA + Treasury maturing in 2045.
But what explains the devaluation of a fixed income security? A mark to market. It was this daily update of the security’s price on the market that left its return in the red in the quarter. Thus, mark-to-market can bring a lot of volatility to investment in Tesouro Direto, increasing its potential return or even making room for losses, as has been happening in recent months.
Paula Zogbi, an analyst at Rico Investimentos, explains that shorter-maturity bonds were impacted differently from longer ones by recent events. In the case of shorter-term maturities, it was the prospect of an increase in the Selic rate before estimated earlier – and its confirmation in March – which messed with prices and fees.
In securities that mature in longer terms, a set of external and internal factors increased uncertainties and impacted profitability. “Outside, it was the increase in the interest rate of the American Treasuries [títulos do Tesouro], which was already on the radar in February and continued throughout March, that decreased the attractiveness of emerging market securities“says Zogbi.
In the domestic scenario, the worsening of the pandemic and the slow pace of vaccination against the covid-19 brought new restrictive measures of circulation for Brazilians and more uncertainties about the economic recovery.
In addition, fears about the country’s fiscal issue, “exacerbated by a budget [para 2021] which underestimated mandatory government spending by R $ 30, R $ 40 billion in the last days of the month, helped to guide the upward movement in interest expectations “, says the analyst.
* Securities that do not have accumulated profitability in the year or in 12 months are available less time and, therefore, there is no return calculation.
please note that these mark-to-market variations only impact your income if you redeem the security before the term. But if you take the bond to maturity, the return “combined with the government” at the time of purchase it’s guaranteed. So, unless you are going to sell your bond before the maturity, do not be alarmed by any negative fluctuations. The ranking is a photo of what happened in the observed period.
Even though the variation is the photo of a specific period, it is natural for investors to have doubts as to whether it is worth putting their money in government bonds, especially in the case of Tesouro Selic, which even though it suffers the least from the market’s “jolts”, had months in the red in 2020.
The chance that this movement will repeat itself cannot be completely ruled out in the coming months, but the Selic Treasury continues to be indicated by 10 out of 10 analysts as an option for emergency and opportunity reserves (for other investments).
The main risk, according to Zogbi, remains the government budget for 2021, considered by economists and market analysts to be impossible to achieve while meeting the spending ceiling. Despite uncertainties on the radar, Zogbi considers “remote” the possibility of jolts in the Selic Treasury rate like those observed last year.
“The Treasury created the LFT [atrelado a Selic] due 2024 precisely to diminish the possible mark-to-market effects on these securities, then it is he who we recommend it for people who prefer to take as little risk as possible“Zogbi explains.
For those who want to invest in government bonds thinking about the long term, and with the intention of staying with them until maturity, the analyst indicates the IPCA + Treasury for 2026 with the objective of protecting itself from still pressured inflation and from the uncertainties about when the price increases will really be controlled in the country.
For those who want to try to use mark-to-market in search of maximizing gains, that is, speculate with the rate variation and redeem the security before earning more, the IPCA Treasury + 2026 is also an option, as it is among those who have a chance to appreciate, if the fiscal outlook improves for the medium term, according to Zogbi.
But remember that speculating is, of course, risky. “As the uncertainty has not diminished and the speed of vaccination and the economic recovery is still very uncertain, we are not indicating titles specifically for speculation at this moment”, says the analyst.
What to expect in April?
For the month that starts, Paula Zogbi highlights four main points of attention that have the potential to mess with Treasury Direct prices and returns. The first one is the vaccination rate against covid-19 and possible further delays in the immunization program in Brazil or worldwide. Vaccine delays mean more time before economies recover.
The second point of attention of the investor should be the interest on the US Treasury bond maturing in 10 years. The yellow alert is on for the last few days after the rate reaches its maximum in the last 14 months, but the red light comes on if the interest exceeds the 2% mark per year.
No brazil, accelerating price indices are still a major source of concern. Although much of this rise in inflation in the first half is already considered within current Treasury Direct prices, Zogbi warns that higher-than-expected results and possible movements of a stronger devaluation of the real may affect the securities.
Finally, another old acquaintance in the market will continue to face the risks, the tax issue. For Zogbi, the main knot to be undone is to understand how the federal government will solve the budget that underestimated expenses and puts the spending ceiling for 2021 in check.
— Foto: Getty Images
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