The beginning of 2021 was marked more by uncertainties derived from the COVID-19
pandemic than by risk. In addition, that period has been marked by economic growth
slowdown, rising inflation and a historic low in interest rates in Brazil. Despite the
beginning of the vaccination campaign in Brazil, the country’s economic outlook was
pessimistic, as the pace of immunization was considered slow, possibly due to logistical
difficulties, and the number of new cases was still high.

Despite such a scenario of uncertainty during the first five months of 2021, Brazilian
Receivable Funds (Fundo de Investimento em Direitos Creditórios (FIDC)) were
reasonably resilient to market volatility. Both the number of funds and equity grew
compared with those in the same period in 2020. From March 2021 on, equity reached
unprecedented levels, when net assets hit the historic mark of BRL 219 billion, and
continued on an upward path throughout that year.

New developments in the beginning of 2022 have suggested a new context for the
Brazilian economy. Both the perspective of controlling the pandemic and the emphasis
given to controlling inflation, after a strong monetary stimulus during the height of the
pandemic, attracted special attention, enhanced by an increase in interest rate by
Brazil’s Central Bank.

Within a scenario of consecutive interest rate rises in the first months of 2022, the
equity growth of FIDCs stands out, as their net assets practically doubled in size
compared with the same period in 2021. FIDCs may, indeed, represent an investment
opportunity in such a context, as their performance is often pegged to the Central
Bank’s interest rate. Furthermore, they generally represent portfolios dispersed
throughout a wide range of receivables, therefore, allowing credit risk diversification.

At the end of April, the consolidated equity in FIDCs totalled BRL 355 billion, among
1,621 funds operating in Brazil. That month, their performance hit its highest historical
level. It is not just the absolute values of the indicators that draw attention, but the
acceleration of growth, in nominal terms, as shown by the green arrows in the chart
below.