Credit: iStock
Small- and micro-cap ETFs participated heavily in the rally across the Brazilian stock market on October 5. TRIG11 advanced 9.76%, SMAC11 gained 9.44%, and SMAL11 rose 9.33%.
The compression of risk premiums following the first round of elections met portfolios with significant exposure to the domestic economy. Retailers, homebuilders, education companies, and credit-dependent businesses reacted to shifting expectations for interest rates and economic activity.
This movement translated directly into stock prices. Magazine Luiza gained 24.18%, Cyrela advanced 18.40%, Assaí rose 16.41%, and Lojas Renner appreciated 15.39%. The magnitude of these gains helps explain the ETF results and shows that the advance was backed by concrete moves among their reference companies.
TRIG11 (Trígono Capital): +9.76%
TRIG11 tracks the Teva micro cap index, featuring a portfolio distinct from ETFs linked to the SMLL index. In the October 1 rebalancing composition, Cogna held a weight of 3.63%, Direcional 2.65%, Marcopolo 2.46%, Magazine Luiza 2.37%, Vivara 2.36%, and Yduqs 2.20%.
Shares of these companies posted significant moves. Cogna advanced 10.70%, Yduqs gained 12.45%, Direcional rose 7.99%, Magazine Luiza jumped 24.18%, and Vivara appreciated 9.76%. The portfolio thus brought together multiple exposures favored by lower expected capital costs and the repricing of consumer- and domestic-activity-linked businesses.
The 9.76% gain brought TRIG11’s return to 15.07% over one month and 10.04% year-to-date. Performance was built on a broad basket of micro caps: education firms participated in the recovery of economic expectations, while retail and construction provided key contributions in a session of strong gains for these sectors.
SMAC11 (Itaú Asset): +9.44%
SMAC11 tracks the SMLL, B3’s small cap index. In the composition analyzed for the baseline date, Assaí represented approximately 4.54%, Lojas Renner 3.47%, and Multiplan 3.05%. These positions place retail consumer spending and shopping centers among the key exposures of the reference portfolio.
Assaí advanced 16.41%, Lojas Renner gained 15.39%, and Multiplan rose 9.77%. The appreciation of these businesses can be viewed through two channels: the prospect of less restrictive financial conditions for consumers and companies, and a reduction in the discount rate used by the market to value future earnings and cash flows.
The 9.44% daily result brought SMAC11 to 14.74% over one month and 12.64% year-to-date. The presence of homebuilders amplified participation in the rally: Cyrela, accounting for roughly 2.22% of the index analyzed, rose 18.40%, reflecting sharp repricing across the sector in a session driven by falling interest rates.
SMAL11 (BlackRock): +9.33%
SMAL11 also tracks the SMLL. In addition to retail, construction, and shopping centers, the reference portfolio includes significant positions in sanitation companies, software, and conglomerates. Copasa held approximately 6.06%, Totvs 4.97%, and Cosan 3.04% in the analyzed composition.
Cosan advanced 23.79%, Copasa gained 8.50%, and Totvs rose 4.16%. The moves demonstrate different avenues of participation in the rally. Companies with long-term capital investments and businesses whose valuation relies heavily on future cash flows benefit from discount rate compression, while firms with notable debt levels also respond to changing perceptions around financing and capital costs.
SMAL11 accumulated 14.60% over one month and 13.11% year-to-date. Its 9.33% daily rise tracked broad appreciation among SMLL companies, whose composition blends distinct sectors and avoids relying exclusively on retail.
Informational content, not an investment recommendation. Past performance is no guarantee of future results.
