XP lowers fixed income portfolio average maturity to three years
Investment bank XP increased exposure to prefixed bonds in recommended portfolios, targeting lower interest rates through reduced asset maturity.
Banco de Investimentos XP raised its recommendation for investors to increase exposure to prefixed bonds in September. The firm simultaneously cut allocations to private credit post-fixed instruments. This adjustment lowers the average maturity of recommended portfolios from four years to three years. XP states that gradual economic slowdown and potential interest rate cuts improve the risk-to-return profile of prefixed bonds. The investment house suggests this shift makes it more selective regarding private credit securities. In conservative portfolios, prefixed bonds represent six percent of holdings. Moderate portfolios hold eleven percent, while sophisticated profiles contain nine point five percent. Post-fixed instruments remain dominant in conservative funds at seventy-one point five percent. Conservative holdings also include twenty percentage points allocated to cash reserves for regulatory minimums.
