FIIS EM 2026: AINDA DÁ PARA GANHAR DINHEIRO?
Audio Brief
Show transcript
This episode analyzes the significant performance disconnect between physical real estate prices and the recent surge in Real Estate Investment Funds, specifically addressing whether investors have missed their entry point.
There are three key takeaways to consider. First, recent market rallies represent a recovery from undervaluation rather than genuine asset appreciation. Second, long-term interest rate curves, not current central bank rates, are the primary drivers of fund performance. Third, the most reliable valuation metric remains the price per square meter relative to replacement cost.
Investors should understand that the recent twenty percent surge in the IFIX index is largely a correction of previous pricing errors. During late 2024, assets were sold significantly below fair value, meaning the current rise is simply a return to normalcy rather than an overheating market. When judging performance, it is vital to look at multi-year horizons to smooth out this volatility, rather than focusing on a single calendar year.
Furthermore, a common trap is waiting for the central bank to cut the overnight Selic rate before buying. The data shows that real estate funds often rally even when the overnight rate rises, provided that the long-term futures curve drops. Asset prices respond to long-term expectations, and smart money moves before official rate cuts occur.
Finally, to determine if an asset is still cheap after a rally, look beyond the stock chart to the physical reality. If the implied price per square meter of a fund's portfolio remains below the cost to build new properties, the investment retains a strong margin of safety. The ideal strategy combines purchasing these discounted assets with locking in high tax-free dividend yields for a dual engine of return.
Ultimately, profit in real estate is generated at the moment of purchase through disciplined valuation, not merely by timing the exit.
Episode Overview
- This discussion analyzes the significant performance disconnect between physical real estate prices and the stock market performance of Real Estate Investment Funds (FIIs), specifically addressing a recent 20%+ surge in the IFIX index.
- The speakers deconstruct the narrative that investors have "missed the boat," shifting the perspective from a short-term rally to a longer-term recovery from a period of severe undervaluation in late 2024.
- This episode is essential for investors trying to understand the relationship between interest rate curves and asset pricing, and for those deciding if current entry points into the real estate market still offer value.
Key Concepts
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The Recovery vs. Appreciation Distinction
- It is crucial to distinguish between genuine asset appreciation and price recovery. The speakers argue that a 20%+ rise in fund quotas does not mean the underlying properties gained 20% in value. Instead, the market is correcting a previous pricing error where assets were sold significantly below their fair value during a "blood bath" period in the prior year.
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Long-Term Interest Curves Drive FIIs
- A common misconception is that Real Estate Funds only rise when the central bank rate (Selic) falls. The episode highlights a counter-intuitive scenario where the Selic rate actually increased, yet FIIs rallied. This occurred because the long-term interest rate futures curve closed (dropped) by 100-150 points. Asset prices are more sensitive to long-term expectations than current overnight rates.
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Price per Square Meter as a Truth Anchor
- To determine if an asset is expensive after a rally, one must look beyond the stock chart and analyze the physical asset. Even after a double-digit rise, if the price per square meter of the portfolio remains below the replacement cost (the cost to build new), the asset is fundamentally cheap.
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The "Combo" of Income and Discount
- The ideal scenario described for high returns involves a "carry" strategy: purchasing assets that are discounted (capital gain potential) while simultaneously locking in high tax-free dividend yields (12-13%). This dual engine drives returns that outperform inflation significantly over time.
Quotes
- At 1:47 - "We do what? Go back a little bit... let's go to [20]24 then. How was the IFIX in [20]24? Negative by 5, if I'm not mistaken. So when you do just the compound of this biennium, you are already with... 16... which gives inflation plus 4 or 3... There is nothing exceptional in this return." - Ricardo explaining that recent high returns are simply a normalization of previous poor performance.
- At 3:40 - "Why did it rise like this flag? Because when you look at the long interest movement, the longer maturities had a closing of more or less 100 to 150 points... the curve stressed on the long end." - Ricardo clarifying that long-term future interest rate expectations, not current central bank rates, are the primary driver of real estate fund pricing.
- At 6:24 - "You earn money with real estate when you buy well. People think 'ah, I need to sell well', no, you need to buy well. You bought well, at some moment you will be able to sell well." - Ricardo emphasizing that the margin of safety and profit is created at the moment of purchase, not the exit.
Takeaways
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Ignore the Short-Term Rate Trap
- Do not base your real estate allocation solely on the current Selic (central bank) rate. Waiting for the official rate cut is often a losing strategy because the market prices in future expectations months in advance; by the time the rate actually falls, the "smart money" has already driven up asset prices.
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Evaluate Assets by Replacement Cost
- When fearing a market top, calculate the price per square meter of the fund's underlying properties. If the market value of the shares implies a price lower than the cost of construction and land, the investment likely retains a margin of safety regardless of recent chart performance.
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Adopt a Multi-Year Time Horizon
- Avoid judging performance based on a single calendar year. Real estate cycles often involve significant drawdowns followed by sharp recoveries. Assessing returns over a "biennium" (two-year period) or longer provides a more accurate picture of volatility-adjusted returns than year-to-date metrics.
