FIIs and Selic Rate: How Interest Rates Affect Brazilian REITs

Selic rising: - Paper FIIs (CDI+): dividends INCREASE (good for income) - Brick FIIs: shares tend to DROP (investors migrate to fixed income) - FOFs: may drop (cascade effect)

Selic falling: - Paper FIIs (CDI+): dividends DECREASE - Brick FIIs: shares tend to RISE (investors seek higher returns than fixed income) - FOFs: may rise

Why does this happen? When Selic is high, fixed income investments (Tesouro Selic, CDB) yield well with low risk. Investors sell FIIs for fixed income, pushing shares down.

When Selic drops, fixed income yields less and investors return to FIIs, pushing shares up.

Smart strategy: - High Selic: buy brick FIIs (at a discount) + CDI+ paper FIIs (pay well) - Low Selic: enjoy brick FII appreciation + reduce CDI+ paper exposure

PaxMoney helps monitor your portfolio composition by type, so you adjust strategy according to the interest rate cycle.