Is the CDI really the Brazilian ‘risk-free’?
Having a large part of wealth indexed to the CDI – a national preference that gained even more prominence with Selic where it is – is not a problem only when interest rates fall. It is a risk – because it has not been enough to protect wealth from inflation, shows a study by Artur Wichmann, the […] The post Is CDI really the Brazilian ‘risk-free’? appeared first on Brazil Journal .
A study by Artur Wichmann, CIO of XP Inc., and colleagues Ruy Ribeiro and Eduardo Marinho, found that investments tied to Brazil's CDI rate have not protected against inflation over the past 16 years, resulting in real losses. The study suggests that CDI should not be considered a risk-free asset, and instead, a portfolio of inflation-indexed bonds with maturities aligned with predictable goals would be a better benchmark for typical Brazilian investors.
In contrast, US T-bills had negative real returns between 2006 and 2026, while TIPS offered positive real returns. The study argues that investors should reconsider their definition of risk and consider inflation-indexed bonds for long-term investments.
Written by urgent.news from Brazil Journal's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
