Brazilian REITs or fixed income with the Selic at 14%?
It depends on your time horizon and the price you pay for the unit. Over the short run — less than two years — fixed-income instruments win hands down, because a REIT unit can be worth less than you paid if you need to sell at the wrong time. Over longer periods, with funds trading below their net asset value, the average Brazilian REIT matches the after-tax CDI on monthly income while also carrying capital-gain potential that fixed income simply cannot offer.
What the standard comparison gets wrong
The most common mistake in market comparisons is placing the FII yield next to the gross CDI rate. The problem: gross CDI doesn't exist for individual investors — it's a benchmark number, not a return you actually receive. Two deductions stand between the headline rate and what lands in your account.
First, Brazil's IOF tax bites redemptions within 30 days, dropping to zero only on day 30. Second, the regressive income tax on interest income starts at 22.5% for investments held up to 180 days and steps down over four brackets to 15% for holdings above 720 days. In other words, a CDB only reaches its minimum tax rate after two full years.
FII dividends are exempt from income tax for individual investors, provided the fund has more than 50 shareholders, the unit is traded on the stock exchange (B3), and the investor holds less than 10% of the fund. This is the same exemption that makes LCI and LCA (bank credit notes linked to real estate and agribusiness) tax-free — and it's precisely what the gross-CDI comparison erases.
Three terms worth knowing before the table: CDI is the overnight interbank rate in Brazil — it tracks the Selic (Brazil's benchmark interest rate, set by the central bank) and is the reference for virtually all floating-rate fixed income. LCI and LCA are bank-issued credit notes tied to the real-estate and agribusiness sectors, tax-exempt for individuals but with lock-up periods and the credit risk of the issuing bank. IFIX is Brazil's benchmark index for publicly traded real-estate investment funds — the REITs' equivalent of Brazil's stock market index, the Ibovespa.
The table that changes the picture
With the Selic at 14% per year, here is how each option compares after stripping out taxes. All monthly figures are approximations meant to compare orders of magnitude, not spreadsheet precision.
| Investment | Per year (net) | Per month (net) | Income tax (individual) |
|---|---|---|---|
| Gross CDI (benchmark) | 14.0% | 1.08% | — |
| CDB (bank deposit) > 2 years | ≈ 11.9% | ≈ 0.94% | 15% on gains |
| LCI / LCA (exempt) | ≈ 12.5% | ≈ 1.02% | Exempt |
| IFIX average (FIIs) | ≈ 10.8% | ≈ 0.90% | Exempt on dividends |
| NTN-B / IPCA+ bond | ≈ 6% + IPCA | ≈ 0.88% + IPCA | 15% on gains |
Looking at monthly net yield alone, the average FII (0.90%) runs about 0.04 percentage points below the net CDB (0.94%) and about 0.12 pp below the tax-exempt LCI (1.02%). That gap is small — and, as we'll see, it closes or reverses when the unit price enters the equation.
The NTN-B, Brazil's inflation-linked government bond (similar to a TIPS), plays a different game entirely: it delivers a real return above inflation (IPCA), providing long-term purchasing-power certainty at the cost of illiquidity — selling before maturity means accepting mark-to-market pricing that may be lower than what you paid.
Yield tells only half the story: P/VP and capital gains
Here is the dimension that quick comparisons ignore. A REIT's yield is the dividend divided by the unit price — it looks like "interest," but the mechanics are different. The fund generates income from the properties or receivables it holds, and the manager calculates distributions based on net asset value (called VP — Valor Patrimonial — in Brazilian), not on whatever price you paid in the market today.
That brings in the P/VP ratio (market price ÷ net asset value per unit). When P/VP is below 1.0, the unit is trading at a discount to the fund's underlying assets.
Take a fund with a NAV of R$ 106 per unit, trading at R$ 90, paying R$ 0.95 per unit monthly. The manager calculates that R$ 0.95 on the fund's assets, but the buyer at R$ 90 receives R$ 0.95 on a R$ 90 cost basis — a yield of 1.06% per month. That is already above the 0.94% net CDB and the 1.02% LCI. The unit discount transfers return to the new buyer.
Then there's the second layer, which fixed income simply cannot match: capital appreciation. If the unit eventually reprices back to NAV (from R$ 90 to R$ 106), that is a 17.8% gain — on top of dividends collected along the way. A CDB or LCI returns principal plus interest, never principal plus a price re-rating upward.
The flip side: a P/VP below 1.0 isn't always a bargain. Sometimes the market is pricing in a real problem — high vacancy, receivables default, expensive debt. The discount becomes an opportunity only when the underlying portfolio is healthy. That's why the fund's quarterly report (relatório gerencial) matters far more than the P/VP ratio in isolation.
When fixed income wins without a contest
For money that might be needed within two years, fixed income is the clear winner. A CDB still carries higher tax rates at shorter maturities and an LCI often has a lock-up period, but both return invested principal, adjusted for interest — your starting amount doesn't shrink.
FII units don't offer that guarantee. Prices move every trading session and a fund may be worth less than your entry price exactly when you need cash. The risk isn't that the dividend disappears — it's being forced to sell at the worst moment, turning a paper loss into a realized one. Emergency funds and short-horizon goals don't mix well with an asset that marks to market in real time.
When Brazilian REITs have a structural edge
The equation shifts in the FII's favor when three factors align:
| Factor | Why it changes the math |
|---|---|
| Horizon of 3 years or more | Enough time to ride out unit price volatility and capture the rate cycle without being forced to sell. |
| P/VP below 1.0 | Dividends calculated on NAV yield more relative to the discounted purchase price — and open the door to capital gains. |
| Rate-cutting cycle ahead | A falling Selic tends to reprice REITs upward, closing the gap to NAV; floating-rate fixed income just yields less. |
On its own, the IFIX average yield of 0.90%/month loses to net CDB. With all three factors combined, the comparison stops being "0.90% vs. 0.94%": it becomes tax-exempt income above net CDI, plus a discounted entry price, plus the prospect of capital appreciation when rates fall. That is the equation the simplistic market comparison doesn't show — and the one Rio Bravo highlighted when measuring that FIIs outperform net CDI over longer time horizons.
What to watch
None of these numbers are permanent. A Selic of 14% is a snapshot from August 2026, and the variables that tip the balance between REITs and fixed income shift with every data release. Four indicators track the moving parts:
Copom meetings (Brazil's equivalent of FOMC) shape the Selic path — and with it, both the CDI return and market appetite for REITs. Monthly IPCA (Brazil's consumer price index) determines the real yield of inflation-linked bonds. And each fund's quarterly report reveals what the yield number alone conceals: whether income comes from property cash flow or reserves that will eventually run dry, how vacancy is trending, and where receivable delinquency stands. With those four indicators on the table, the REIT-vs-fixed-income comparison stops being a fixed answer and becomes a calculation each investor makes with their own time horizon and risk appetite.
