2023-06-09 16:00:21
The increase in the IPCA was due to the Health and personal care group. On the other hand, the drop in prices in the Transport, Household Items groups and a slowdown in some household food items contributed more to hold back the advance of inflation.
Inflation divided by groups:
- Food and beverages: 0.16%
- Housing: 0.67%
- Home items: -0.23%
- Clothing: +0.47%
- Transport: -0.57%
- Health and personal care: +0.93%
- Personal expenses: +0.64%
- Education: +0.05%
- Communication: +0.21%
See where to invest to protect your money
The performance of your investment portfolio does not depend only on the performance of assets. You also need to think about economic issues, which means understanding the effect of inflation on investments.
This indicator has a great impact on your equity and the purchasing power you have. Therefore, depending on your choices, it is possible to protect yourself from this variation, which can favor the achievement of goals over time.
Here, our expert explained three good reasons to invest in IPCA+ in fixed income, just take a look!
Knowing the effects of the rate, protecting your investment portfolio from inflation is essential. That way, you have chances to maintain your purchasing power or even increase it, evolving equity.
In the long term, positive results tend to accumulate, becoming even more relevant. To have this protection, one of the strategies is to diversify the portfolio. With the allocation in different assets, there is a chance to dilute the risks and increase the return to stay above inflation.
Another measure for this is to invest in inflation-linked securities, if it makes sense for your investor profile and your goals. In this way, opportunities arise to consolidate a performance above inflation, avoiding the loss of purchasing power.
What investments are linked to the IPCA?
As you’ve seen so far, investments linked to inflation can be solutions to protect yourself from losing the value of money. They are usually fixed income financial investments, whose yield depends on inflation.
Thus, the return obtained follows the movements of the indicator. Next, see what are the alternatives that can help you have this protection!
Treasury IPCA+
One of the main examples is the IPCA+ Treasury. This is a public bond issued by the National Treasury to raise funds for the Federal Government. Its income is given by a fixed rate plus the IPCA variation.
This security has daily liquidity, but the advance sale is made at the price of the day, in what is known as mark-to-market. If the price is below the purchase price, losses may occur. Therefore, to guarantee the contracted yield, it is necessary to carry the bond to maturity.
It is also important to know that the IPCA+ Treasury is long-term. However, there are securities with Semiannual Interest, which pays yield coupons every 6 months.
hybrid titles
In addition to the IPCA+ Treasury, specifically, it is possible to invest in fixed income securities with hybrid returns. It works in the same way as the federal bond: they are pegged to the IPCA and have a fixed rate.
This is what happens with the bank deposit certificate (CDB) or with the real estate credit letter (LCI) and agribusiness letter (LCA), which can be hybrid. In this case, there is protection from the Credit Guarantee Fund (FGC), which protects up to BRL 250,000 per CPF and financial institution, with an overall limit of BRL 1 million.
For those willing to take more risks, there are private credit bonds. Among them are real estate receivables (CRI) and agribusiness (CRA) certificates and hybrid return debentures.
inflation funds
Another financial market option is the inflation fund. In practice, the investment fund is a financial vehicle that allows investment through the acquisition of participation quotas. Operations are carried out by a professional manager, who makes decisions according to the defined strategy.
In the specific case of inflation funds, most of the resources are allocated to bonds linked to inflation. These are fixed income funds and aim to outperform inflation-linked indices, such as the IMA-B (ANBIMA Market Index – series B).
The investment can be made in bond funds with maturities of up to 5 years or with maturities equal to or greater than 5 years. In addition, the strategy may involve selling securities according to potential and marking to market, for example, which can also boost returns.
What is the impact of IPCA and GDP on investments?
The GDP preview shows that the economy is slowing down, largely due to the current level of interest rates. At the same time, the Selic is at 13.75% and inhibits company investments, with credit more expensive and also more restricted, explains Karina Afuso, investment advisor at Renova Invest.
Therefore, a smaller GDP means less investment in companies, which reduce their structures. As a consequence, it will result in less employment and it is a bad cycle for the country as a whole, weighing heavily on the economy.
It is worth remembering that interest rates are at this level, because the Central Bank has not yet seen the expectation of inflation cool down. And speaking of investments, investments linked to inflation, that is, that pay IPCA + fixed rate, are good alternatives, as they protect purchasing power, says the advisor.
Fixed income continues to be the darling of investors’ portfolios, due to the attractiveness of the return. It’s a smart move to ride the wave and secure profitability. As much as high inflation is not positive for the economy, it is something that values these assets that are indexed to the indicator.
With a higher GDP, it means greater security in the economy and attracts investors. The scenario is positive because it shows the evolution of economic activity, in which companies are investing and the population is consuming. Thus, investments in the productive sector become more interesting because they offer higher yields than fixed income and savings.
But everything changes if this growth is accompanied by high inflation, as is the current case in Brazil. Because it means that there is a reduction in the consumption of the population and companies step on the brakes. If you are investing in variable income, be careful with fluctuations and allocations in times of uncertainty.
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Do you want to know more about the alternatives available in the financial market? Please contact us from Renova Invest and see how our investment advice can help you!
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