Why has Brazilians’ interest in equities increased?

Por Cassio J. Krupinsk
Em 05/03/2024

Two important and positive phenomena have been changing the behavior of Brazilian investors in recent years: the growth of asset tokenization and interest in variable income assets.

The increase in the participation of shares, funds and other assets in the investment mix is one of the conclusions of XP’s monthly survey on investor preferences, measured between January 4 and 10, 2024.

A number of factors explain this extremely positive phenomenon, which has taken the investment market away from the conservatism that still sustains the savings account – even though it is not an investment in itself, as it does not value the capital invested – a basic premise of investing.

On the other hand, the market has a variety of fixed-income products with good performance to suit those who prefer safety to risk. So why do more people want to invest in equities?

BLOCKBR, a company that develops tokenization infrastructure, will talk about the growth bias of variable income assets and what paths are opening up with this scenario!

FIGURES SHOW THE GROWTH OF VARIABLE ANNUITIES IN BRAZIL

XP’s monthly survey is carried out with around 150 investment advisors hired by or affiliated to the company and is a thermometer of Brazilian investment trends. Some of the data is striking.

The universe of clients wishing to start or increase their exposure to shares rose from 58% in December to 65% in January;
The number of clients investing more than 25% of their portfolio in shares rose from 22% to 24%;
Shares also rose in preference among assets, from 56% to 61%;
Real estate funds are still the favorite with 63%;

Interest in investing in crypto-assets rose from 3% to 12%, which shows that investors and advisors are signaling their interest in this asset class, which is booming in economies.

WHAT EXPLAINS BRAZILIANS’ GREATER INTEREST IN VARIABLE INCOME INVESTMENTS?

For many years, the main attractiveness factor between fixed and variable income was always the government’s basic interest rate policy, but globalization and virtually unrestricted access to information have completely changed this picture.

REDUCTION IN THE SELIC RATE

The fall in the basic interest rate is, in itself, an adjustment factor in the mix of investment volumes – the higher the rate, the more attractive the fixed-income products, which use the index as the basis for their returns.

The downward trend in the Selic rate that occurred throughout 2023 and which, according to experts, should continue in 2024, is a trigger for variable income investments to become more attractive.

STABILITY OF THE BRAZILIAN ECONOMY

The approval of the fiscal framework and the tax and administrative reforms in 2023, as well as other factors – stabilization of the dollar, greater control of inflation and GDP growth – were signs of an economy that continues to stabilize and grow.

The good results of agribusiness, energy companies, oil companies and other sectors indicate that more people see the stock market as a more attractive option.

MORE ACCESS TO INFORMATION

Investing safely and assertively depends directly on knowledge about the market and the dissemination of information by experts and institutions such as BLOCKBR allows you to get to know the investment universe and invest in variable income with more confidence.

This breaks down the barriers that used to make shares, funds and other assets almost exclusive to bold and/or experienced investors.

GREATER DEMAND FOR INVESTMENT ADVISORS

The demand for the services of an investment advisor is growing among those who want to increase their earnings and minimize their risks as much as possible, but who haven’t mastered the nuances of the financial market or can’t keep up.

BUT WILL FIXED-INCOME ASSETS LOSE STRENGTH?

Certainly not!

We are still a young society when it comes to investing, and even more so when risk has to become part of structured medium and long-term financial planning.

Understanding losses as part of the process and having a contingency plan are challenges that require a change in investment mentality and greater self-knowledge as an investor.

Moreover, even in bold investment portfolios, fixed-income assets are important for balancing long-term performance and serving as a basis for bolder investments.

One thing is certain and positive: investors are gradually understanding the poor performance of savings accounts, they understand that they can be a minimum emergency reserve, but they also know that the market has countless ways of treating money well.

One of them is investment tokens.

Invest in BLOCKBR tokenization — Image: Canva

WHY INVEST IN TOKENIZATION NOW

In a dynamic investment market, where higher and lower risk options are attractive and compete for space, tokenization is a great strategy for companies that want to raise funds and generate revenue by offering investments with good yields and different levels of risk.

Virtually everything can be tokenized, from real and financial assets to products and services and business projects with remuneration for investors.

Residential and commercial properties;
Vehicles, equipment and works of art;
Agricultural and livestock production;
Rights such as precatory payments and receivables from companies;
Participation in business projects.

Tokenization is the business module that enhances the attractiveness of the asset through an offer with greater liquidity, more security and without intermediaries, democratizing investment and generating excellent results for asset owners and investors.

Want to know how to tokenize an asset? The real estate market, one of the most regulated in the country, has the recipe for any business!

TOKENIZE ASSETS WITH BLOCKBR AND BOOST YOUR RESULTS!

Tokenization is a reality in the market, with an increasing number of companies and people generating revenue with tokens. Recent actions by BACEN and the digital real are increasing the credibility of the technology.

For the success of your project, it is essential to have an adequate and efficient tokenization infrastructure for the financial and other markets, comprising:

Technical, fiscal and legal feasibility study;
Issuance of tokens and smart contracts with transparent governance;
Distribution of tokens on a simple and secure sales platform;
Efficient and assertive tokenization governance.

Discover BLOCKBR’s infrastructure work for regulated and unregulated markets through an All-In-One platform that offers interoperability between assets and investors.

You don’t want to see your competitor get ahead to make more money.

Or do you want to?

BLOCKBR is a fintech specialized in building infrastructure that allows a simplified migration to tokenization, meeting the needs of a highly regulated environment.

Our main mission is to develop autonomy for the capital market so that it can move, grow and potentially access digital assets. We develop legal and technological solutions that create opportunities and simplify the way in which financial services will operate, from the structuring and new roles of the agents involved to the management and supply of these assets, generating efficiency, lower costs and greater speed of liquidity.

We take care of the entire technological infrastructure for tokenization and regulation, simplifying your life so that you can take care of your customer relationship.