Credit: iStock
PACB11, managed by BTG Asset, rose 1.17% on Tuesday, October 6, leading gains among the analyzed government bond ETFs. TD3511 advanced 0.61%, IRFM11 gained 0.52%, and B5MB11 climbed 0.48%. The performance extended share price gains from earlier in the week, marked by significant yield curve repricing following the first round of the elections.
The direction of returns was positive across various strategies, but intensity varied based on maturities and bond yield structures. Portfolios with long inflation exposure posted steeper gains, while floating-rate Treasury Selic positions experienced moderate variation aligned with their carry profile.
How the Yield Curve Shifted
Real yield curve compression was pronounced on Monday, October 5. The rate on the 2029 NTN-B moved from 7.46% to 6.96%; the 2035 bond fell from 7.65% to 7.04%; and the 2050 maturity dropped from 7.27% to 6.76%. These represented cuts of 50, 61, and 51 basis points, respectively. For existing bondholders, lower yields translated into higher bond prices, with the sharpest impact on high-duration exposures.
On Tuesday, the nominal yield curve continued flattening across select maturities. The January 2029 DI contract closed at 12.445%, down 14.6 basis points from 12.591% at the previous settlement. The January 2031 contract fell from 12.653% to 12.560%, a drop of 9.3 basis points. The movement was not uniform: the January 2027 contract ticked up from 13.410% to 13.428%.
This configuration demonstrates that repricing centered primarily on long-duration risk premiums rather than a uniform drop across the entire curve. Investors re-evaluated the election outcome and risks surrounding future economic trajectory. Falling US Treasury yields on Tuesday added a favorable external backdrop for local interest rates.
PACB11 (BTG Asset): +1.17%
PACB11 focuses its strategy on ultra-long IPCA-linked Treasury bonds. In the index composition rebalanced on October 1, 2055 NTN-B bonds held a 60% weight, while 2050 and 2060 issues represented 20% each. This design concentrates interest rate risk in distant cash flows whose present value reacts sharply to shifts in real yields.
The 51 basis point drop in the 2050 NTN-B rate on Monday illustrates the movement impacting this section of the curve earlier in the week. Exposure to ultra-long maturities allows the fund to capture bond appreciation with greater intensity when real yields decline. Share prices accumulated a 6.39% weekly gain through Tuesday, alongside 11.06% over the past month and 16.27% year-to-date.
TD3511 (Itaú Asset): +0.61%
TD3511 concentrates exposure in IPCA-linked Treasury bonds maturing on May 15, 2035. The portfolio tracks ANBIMA’s benchmark for this specific bond, offering targeted yield curve exposure compared to funds spreading allocations across multiple maturities. The 2035 yield fell 61 basis points on Monday, from 7.65% to 7.04%, a significant shift for a bond carrying many years of remaining cash flows.
Tuesday’s 0.61% gain brought cumulative weekly returns to 2.66%. Share prices advanced 5.72% over the past month, reflecting recent appreciation in this specific segment of the inflation curve.
Want to follow discussions on indices, strategies, and the ETF market? INDEX 2026, DEX’s annual event, takes place on November 12 in São Paulo. Secure your spot.
IRFM11 (Itaú Asset): +0.52%
IRFM11 tracks the IRF-M P2 index, composed of nominal fixed-rate Treasury bonds, including LTNs and NTN-Fs. Unlike inflation-linked bonds, these instruments carry defined nominal yields. When the market requires a lower rate for equivalent cash flows, existing bond prices increase.
The drop in 2029 and 2031 DI rates on Tuesday highlights performance across the belly of the nominal curve. IRFM11 accumulated a 2.99% weekly gain and 12.55% year-to-date. The 0.52% daily advance occurred in an environment of declining intermediate-term risk premiums, despite a slight uptick in the 2027 DI contract.
B5MB11 (Bradesco Asset): +0.48%
B5MB11 tracks the IMA-B 5+ index, gathering NTN-Bs with maturities exceeding five years. The portfolio participates in long-term inflation bond rallies while spreading exposure across multiple maturities rather than concentrating in a single issue or purely at the extreme end of the curve.
Drops in 2035 and 2050 real yields earlier in the week impacted segments represented by this investment universe. Share prices advanced 4.84% on the week through Tuesday and 7.96% over the past month, demonstrating the cumulative strength of long-duration inflation exposure.
3PRE11 (Galapagos Capital): +0.47%
3PRE11 follows a fixed-rate bond strategy with a target duration of three years. In the October 1 index composition, 2029 NTN-F bonds held a 24.59% weight, alongside LTNs maturing in January/July 2029 and 2030, plus 2031 and 2033 NTN-Fs. These bonds combine interest and principal payments across different horizons, but the portfolio is structured to maintain a nominal rate sensitivity of approximately three years.
The drop in the 2029 DI contract from 12.591% to 12.445% was significant for this exposure profile: the fund captures fixed-rate curve repricing. Tuesday’s 0.47% gain brought weekly returns to 3.86%, while one-month performance reached 5.08%.
IMAB11 (Itaú Asset): +0.44%
IMAB11 tracks a broad basket of NTN-B bonds in the IMA-B index, spanning short and long maturities. This distribution enables participation across various segments of the real yield curve. Appreciation in long-dated bonds contributes to performance, while short-dated issues reduce duration concentration.
Tuesday’s 0.44% gain occurred within a 3.60% weekly rise. Year-to-date, IMAB11 was up 14.17%, close to B5MB11’s 14.22%, despite the two ETFs holding distinct interest rate risk profiles.
NTNS11 (Investo): +0.19%
NTNS11 concentrates exposure in shorter-dated IPCA-linked Treasury bonds. In the October 1 index portfolio, 2028 bonds held a 34.63% weight, 2030 bonds 29.06%, 2027 bonds 24.77%, and 2029 bonds 11.54%. Benchmark duration stood at approximately 2.04 years as of October 6, noticeably lower than long-duration strategies.
The decline in the 2029 real yield earlier in the week benefited this section of the curve, but shorter duration limits price sensitivity to interest rate shifts. Share prices accumulated a 1.12% weekly gain and 12.20% year-to-date.
LFTS11 (Investo): +0.04%
LFTS11 tracks floating-rate Selic-linked Treasury bonds (LFTs). In the October 2 composition, LFTs maturing in March 2029, September 2028, and June 2032 represented 12.43%, 11.30%, and 10.23%, respectively. Despite their maturity dates, floating-rate yields modify the risk profile: bond returns track the benchmark Selic rate, minimizing yield curve sensitivity compared to fixed-rate and long-term NTN-Bs.
The 0.04% daily return and 0.11% weekly gain reflect steady carry behavior, in contrast to sharper price appreciation seen in longer-duration portfolios. Year-to-date, share prices were up 10.71%.
This content is for informational and educational purposes only and does not constitute an investment recommendation.
