CDIB11 didn't drop because the Selic rate is low. It fluctuated because part of its portfolio is tied to a 34-year bond—the NTN-B maturing in 2060—which rises and falls as the market revises long-term real interest rates. The Focus Report released today by Brazil's central bank raised its Selic forecast to 13.75% for the end of 2026 and confirmed that no rate cuts are expected this year. For 90% of the fund, this is excellent news; for the remaining 10%, what matters now is where 2027 inflation is headed.
Why Is CDIB11 Falling?
The answer lies in what the ETF actually is—and what most investors think it is. CDIB11 (It Now Teva ITBR Selic IPCA Target 800, managed by Itaú Asset) was launched in June 2026 as an alternative to traditional bank CDs, with the advantage of avoiding Brazil's semiannual withholding tax known as *come-cotas*. What few realize is that "tracking the Selic" isn't the whole story for the portfolio.
The fund combines two layers: the larger one consists of *Letras Financeiras do Tesouro* (LFTs), which account for about 90% of assets under management and yield close to the benchmark rate on a daily basis without price volatility; and a smaller layer in NTN-Bs maturing on August 15, 2060, representing roughly 10% of the fund. This second layer is marked to market every trading session. When the market demands a higher premium to lend to the government for 34 years, the price of this NTN-B drops—dragging the CDIB11 unit price down with it.
LFTs (Tesouro Selic) maturing in 2031–2032. Yields close to the CDI rate with no price fluctuation.
NTN-B 2060, marked to market. Rises and falls as long-term real interest rates move.
The reason for holding this NTN-B isn't speculative—it's tax-related. For the ETF to offer a fixed 15% income tax rate (instead of the regressive tax bracket that starts at 22.5%), the portfolio's average duration must remain around 800 business days. An LFT maturing in 2032 cannot deliver that duration on its own, so the index uses the long-term NTN-B to balance the calculation. Investors win on taxes; they pay for it with a bit more volatility.
In October 2026, the month Copom kept the Selic rate at 13.75%, data from ETFs Brasil showed that CDIB11's monthly return receded to +0.6%—well below the +1.1% to +1.3% recorded between August and September. The largest drawdown since launch occurred on October 29. The difference stemmed from the NTN-B 2060, pressured by the widening of the long-term yield curve in the post-Copom period. Since June, the ETF has moved from R$ 50.08 to around R$ 52.70, accumulating a gain of roughly +5.9% over the period—but October left a mark that prompted many investors to research what happened.
Does CDIB11 Pay Monthly Dividends?
No. CDIB11 does not distribute monthly yields the way real estate investment funds (FIIs) do. Because it is a fixed-income ETF, all returns—interest from the LFTs and inflation correction from the NTN-B—are incorporated daily into the unit price. Investors only actually receive the cash when they sell their units on the exchange, at which point they pay a 15% capital gains tax (free from *come-cotas* and the regressive tax scale that penalizes short-term redemptions in bank CDs). For anyone searching for "CDIB11 dividends": the ETF is not an FII and does not distribute monthly payouts—its returns appear as unit price appreciation.
What Today's Focus Report Changes for Unit Prices
The Central Bank published the Focus Report on Monday (Nov 9), compiling market expectations collected through November 6. The primary change was a revision to the year-end 2026 Selic forecast, moving from 13.50% to 13.75% per year—precisely its current level. In other words, according to *Money Times*, the market "has stopped expecting Selic rate cuts in 2026." The complete projection table:
| Indicator | Previous Week | Focus (Nov 9) |
|---|---|---|
| Selic (end of 2026) | 13.50% | 13.75% |
| Selic (end of 2027) | 12.50% | 12.50% |
| Selic (end of 2028) | 11.00% | 11.00% |
| IPCA 2026 | 5.22% | 5.22% |
| IPCA 2027 | 4.76% | 4.90% |
| GDP 2026 | 1.76% | 1.75% |
| USD (end of 2026) | R$ 5.34 | R$ 5.35 |
For the LFT component of CDIB11, the takeaway is straightforward: a 13.75% Selic rate with no prospect of cuts in the remaining two months of the year means the bulk of the fund will continue yielding close to 1.1% gross per month. After deducting the 0.14% annual management fee, the ETF delivers a return very close to the CDI rate for investors holding through year-end.
The point of concern is 2027 inflation. The upward revision of the IPCA inflation index from 4.76% to 4.90%—its fourth consecutive increase according to the Focus Report—moves in the opposite direction of what the market needs to see before policymakers can begin opening the door to rate cuts in 2027. If inflation expectations keep climbing, the long-term real interest rate curve could widen again, and the NTN-B 2060 will once more pressure the unit price. That is not what is happening today—but it is the structural risk of the product that October laid bare.
The Tax Advantage Made Visible by November's Come-Cotas
In May and November, the government automatically withholds 15% of accumulated earnings in traditional fixed-income funds and daily-liquidity bank CDs—a mechanism known as *come-cotas*. A bank CD that returned +1.13% per month over the past six months loses a few centavos compulsorily right now. Because CDIB11 is an exchange-traded fund, it bypasses this event: income tax is only triggered when the investor sells units. For anyone who entered before November and maintains their position, the tax bite on traditional DI funds has already hit—while CDIB11's remains deferred. This is a tangible advantage for investors with a medium-term horizon, and it ties directly into the high-interest-rates-for-longer scenario confirmed by the Focus Report today.
Within a recommended portfolio context, cash sector analysis shows how post-fixed allocations have been a core pillar ever since the Selic rate crossed 12%. CDIB11 fulfills this role—with the caveat of its long NTN-B slice, which introduces the volatility that catches investors off guard who expected exactly zero daily variance.
If the median 2027 IPCA projection in the Focus Report falls below 4.80% in the coming weeks, pressure on the long curve will ease, the NTN-B 2060 will recover value, and monthly returns will return to the +1.1% to +1.3% range.
Further upward revisions—heading into a fifth or sixth consecutive week of increases—will keep widening the long curve and compressing monthly returns below the pure CDI rate, repeating or worsening October's results.
October's volatility is not a sign of a product or management flaw—it is the expected behavior of an ETF with an 800-day target duration. The fund continues to do what it promises: exposure to the CDI with tax efficiency and no *come-cotas* withholding. If you bought in before November and are holding through year-end, traditional funds have already taken their tax hit—yours hasn't. The most urgent decision isn't to sell: it's to understand what you own. Anyone expecting a pure Tesouro Selic with zero price variance needs to reassess whether their risk profile matches an ETF with 10% allocated to a 34-year NTN-B.
2027 IPCA in each Monday's Focus Report—if the median exceeds 5.00%, the long curve could widen further and pressure the NTN-B 2060 once again. Track updates on the Selic dashboard and upcoming Copom meeting page.
Copom Minutes (Tuesday, Nov 10)—the market expects the document to provide clues regarding the 2027 rate cycle. A hawkish tone could reopen the yield curve; a dovish tone could relieve pressure on the NTN-B and benefit unit prices.
USD above R$ 5.55—a weaker exchange rate fuels imported inflation, which would place further upward pressure on 2027 IPCA expectations. With the U.S. dollar trading at R$ 5.52 today and showing positive daily movement, the margin for error is narrow.
