Real estate fund changes strategy and increases dividend yield to 15%; Selic hike could help even more – Money Times

O Brio Multi-Strategy (BIME11), real estate fund managed by Brio Investmentsreaps the rewards of a strategic shift in its portfolio. The reallocation raised the dividend yield (DY) annual FII to 14.9% on the share at the end of August.

The management, led by Jefferson Honório, partner at Brio, carried out role exchanges high grade by high yield of the portfolio in recent months, that is, it exchanged securities that offered more security, but with more modest returns, for those that offer higher returns, but with more risk. In addition, management optimized the average duration of invested operations, which went from 4.1 years to 2.2 years.

The fund generated cash income equivalent to R$0.091 per share in August and announced the distribution of income of R$0.085 per share in September, which represents a DY of 12.6% on the equity share on August 30th. The distribution of dividends was held last Friday (13).

This way, the wallet configuration is at 70% in CRIs20% in FIIs and 10% in swaps, an investment thesis considered the house's flagship, in which Brio Investimentos, through its funds, acquires land in upscale neighborhoods in the city of São Paulo and receives a share in the sale of the projects together with the developers.

In the recently published August management report, management also assesses that, by the end of 2024, R$0.085 per share is a comfortable distribution level.

What happens to multi-strategy funds with the increase in the Selic rate?

O Monetary Policy Committee (Copom) announced this Wednesday (18) the sixth decision of the year on the Selic rate. The collegiate of Banco Central decided to increase it by 0.25 basis points. In this way, the BC returns to monetary tightening.

According to Honório, the manager understands that the Selic rate hike cycle may be prolonged, depending on the government's fiscal response, and that this trajectory of high interest rates directly affects the performance of FIIs.

• See where to invest with the rise in Selic and the Fed cut; live on Giro do Mercado at 12pm, click to watch:

“In a positive scenario, if this upward cycle is successful, we may see a re-anchoring of future expectations and a lower level of long-term interest rates, with positive repercussions for real estate funds in general,” ponders the executive.

In the short term, however, he believes that FIIs that invest in solid credit assets should fare better amid uncertainty. “In an environment of high interest rates, credit assets tend to be more resilient, while in times of low interest rates, brick funds tend to perform better through capital gains,” he says.