40 thousand people who bought Eletrobras with FGTS migrated – 06/25/2023 – Market

Of the little more than 370 thousand people who invested BRL 6 billion from the FGTS (Fundo de Garantia do Tempo de Serviço) in the privatization of Eletrobras in June last year, 11%, or around 40 thousand, migrated to funds with a more diversified stocks.

These funds, the FMP (Mutual Privatization Fund) Carteira Livre, were created by banks and brokerages at the end of last year to receive investors who want to leave the FMP Eletrobras, which only have shares in the energy company.

Eletrobras shares have fallen by around 4.5% since the privatization, which priced the shares at R$42 at the time —on Friday (23), they closed at R$40.08.

Attempts to increase influence over the company by the government and the rains that increased reservoir levels and reduced energy prices have weighed on Eletrobras’ performance on the Stock Exchange in recent months.

Analyst at Toro Investimentos, Paloma Brum welcomes the migration to FMP Carteira Livre. They don’t need to limit their allocation to a single asset, so they have the possibility of putting together a more diversified portfolio, says the specialist.

She also recalls that these funds have the prerogative of having a portion of the portfolio allocated to equities, with another turned to fixed income, which may favor a composition of investments with a more efficient risk-return ratio than exclusively in a single investment. action.

“In this way, the investor tends to have a smoother investment experience, with less volatility.”

XP, BTG Pactual, Itaú, Santander, Genial and BB launched funds along these lines between the end of 2022 and the beginning of 2023.

For those who migrated to the Free Carteira FMP, or for those who remained in the Eletrobras funds, the withdrawal follows the same rules as the FGTS redemption, such as retirement, property acquisition or dismissal. See the 16 FGTS withdrawal situations allowed by law.

In addition, after a year of privatization, since June 14, savers also have the option of migrating the money invested in Eletrobras back to the FGTS.

Analyst at Ativa Investimentos, Ilan Arbetman says that, given the meager return of the FGTS of 3% per year plus the TR (Referential Rate), currently at 2%, he does not recommend migrating the FMP Eletrobras back to the guarantee fund.

Arbetman also says that, for investors who already have a diversified portfolio in other financial investments, it may make sense to remain in Eletrobras funds, which in these cases represent yet another diversification factor within a broader portfolio.

In any case, he recognizes that the government’s pressure to increase its influence in the company and the high levels of the reservoirs may keep the electric company’s shares under pressure in the short term.

Chief equity analyst at Simpla Club, Gabriel Bassotto says that migrating back to the FGTS may be worthwhile for those people who are about to retire or who fall into one of the situations that allow withdrawals.

“Even yielding little, the FGTS offers greater security than the FMPs, either from Eletrobras or the Free Carry, which, because they are in the variable income segment, can present a negative profitability in the short term.”

Itaú’s investment products manager, Tatiana Belizario says that the bank has received some requests over the last few days from customers who want to return to the FGTS, but that, in the vast majority of cases, they are precisely from those who are in a position to do so. withdrawal of the resource.

“There are few cases of customers who ask to return to the FGTS to continue with the money yielding the 3% plus the TR”, says the expert.

Investor who made the migration has been successful so far, says XP manager

Most of the FMP Carteira Livre have not completed six months yet, and, by CVM (Securities Commission) rules, cannot disclose the accumulated profitability in the period.

Among those that have already surpassed the period, XP Investor FMP has returned 12.6% since its launch, on November 25, 2022, until June 20, 2023, compared to a 13% drop in Eletrobras shares in the period.

XP launched two FMPs classified as Carteira Livre to receive funds from those who want to exit funds with Eletrobras shares — the XP Investor, which replicates the existing strategy since 2006, and the Balanced XP FMP FGTS, which follows the original strategy up to 51% of the portfolio, with the other 49% in public securities. Balanced accumulated a return of 8.6% in the year.

“The investor who made the migration has been successful so far, which does not mean that this will happen again, since past results are no guarantee of future results”, says Marcos Peixoto, manager of XP Asset.

The funds have 15 to 20 stocks in their portfolio, with the electricity sector being one of the main positions, representing 25% of the portfolio.

Auren Energia, Equatorial, Energisa and Eletrobras itself, which the manager hopes will increase in value with the efficiency gains brought about by privatization, make up the names of the electricity sector in the portfolio.

It is a resilient segment of the economy, which will remain in demand regardless of the economic scenario and which tends to do well in scenarios of falling interest rates, says Peixoto.

BB and Itaú and commodity companies Petrobras, PetroRio, Gerdau and BR Foods are also among the main investments in XP Asset’s funds.

Higher cost offsets risk of concentration in a single asset, experts say

Due to their active management, the Carteira Livre FMPs have a higher management fee compared to the FMP Eletrobras mono-shares, in order to remunerate the manager for the work in selecting the shares.

A survey by Einar Rivero from TradeMap shows that, on average, FMP Eletrobras have a management fee of 0.2% per year, while FMP Carteira Livre charge 1.5%.

Laércio Henrique, partner at BTG Pactual and portfolio manager at Absoluto Carteira Livre, says that the higher cost more than compensates for the investor’s risk of investing in a single asset.

Investors who were allocated in Americanas at the beginning of the year are a good example. Although it was a company with a long history in the market, controlled by executives considered as a reference, the retailer’s shares collapsed 80% in January after accounting inconsistencies that the company recognized were fraud.

“The fund has a higher rate because it has much greater management intelligence, and the profitability it seeks to achieve offsets this higher cost”, says Tatiana, from Itaú.

In mid-February, the bank structured the Itaú Balanceado Ativo FMP FGTS Carteira Livre fund, which has 45% fixed income, whether in public or private securities, the objective of which is to exceed the CDI, and 55% in variable income, with the goal of outperforming the Ibovespa.

In the early 2000s, the bank had already structured two FMP Carteira Livre funds, to receive funds from mutual funds created within the scope of the Petrobras and Vale stock offerings at the time. The two oldest funds have passive management strategies, with the aim of following the CDI and Ibovespa. “We understand that the best option for the client is the Balanceado Ativo, which has an active management”, says Tatiana.

In the opinion of Henrique, from BTG Pactual, the moment is propitious for investors to diversify their portfolio in the variable income market, given the likely drop in interest rates in the second half.

In January, André Esteves’ bank launched two FMPs Carteira Livre, the FMP FGTS Reference Absoluto, with 95% in shares and 5% in government bonds, and the FMP Reference Absoluto Moderado, with 60% in shares and 40% in government bonds. Gains for both are between 5.5% and 6% since launch.

The electricity sector, via energy distributors such as Energisa and Equatorial, Itaú and the car rental company Localiza are among the main positions of BTG funds.

“Brazilian shares are very depreciated and have a relatively high appreciation potential by historical standards”, says Henrique, who claims that he is looking at companies with the potential to grow profits between 15% and 20% a year.