FII Comparator: How to Analyze Three Real Estate Funds Side by Side
Choosing between hundreds of listed real estate funds on B3 is hard. A structured FII comparator reduces the noise to a handful of metrics you can evaluate in one sitting. This guide walks through a side-by-side analysis of three fund categories — brick, paper, and hybrid.
TL;DR
- Dividend yield alone misleads: a trailing yield rises when price falls, which can signal a cut, not a bargain (a "yield trap").
- Compare funds in the same category — strategy drives valuation, so mixing brick and paper distorts every ratio.
- Liquidity, vacancy, and concentration matter as much as yield: a fund you cannot exit cheaply is not a holding.
What Is an FII (and How Does It Differ From a REIT)?
A Fundo de Investimento Imobiliário (FII) is a pooled vehicle that buys real estate or real-estate-linked securities and distributes income to quota holders. B3 defines it as a pooled resource aimed at real-estate assets. FIIs are regulated by CVM Resolution 175/2022 and Law 8.668/1993. Most have indefinite duration, so you exit by selling quotas on the secondary market — the structural parallel to U.S. REITs. Nareit (REIT.com) notes REITs "own or finance income-producing real estate" and most "trade on major stock exchanges" REIT.com. The main difference is tax: FII distributions are exempt from income tax for individuals if the fund has 50+ quota holders, trades only on an exchange, and no single holder owns 10%+. Capital gains on quota sales are taxed at 20% gov.br Portal do Investidor. For the U.S. analogue, see REIT taxation and structure.
The Three Funds We Will Compare
The table below labels three illustrative funds by strategy. Figures are rounded; re-check against each fund's latest monthly report before any decision.
| Fund | Ticker | Category | Focus |
|---|---|---|---|
| Kinea Índices | KNRI11 | Brick | Index-linked lease rent (logistics warehouses) |
| Maxi Renda | MXRF11 | Paper | CRIs paying floating plus spread (homebuilder receivables) |
| CSHG Logística | HGLG11 | Brick | Warehouses leased to multiple logistics operators |
These cover the comparator spectrum: one brick fund tied to rental income, one paper fund tied to debt, and a second brick fund to control for sector concentration. For the full taxonomy — development, fund-of-funds, hybrids — see Bora Investir's glossary.
Which Metrics Belong in a Comparator?
Yield: trailing, forward, and the yield trap
Dividend yield is "the ratio of annualised cash dividends to the share's current market price." Wikipedia distinguishes trailing yield (previous 12 months), forward yield (annualized most recent dividend), and indicated yield (announced dividend annualized). For FIIs, monthly reports list a trailing 12-month dividend per quota Dividend yield (Wiki). Standardize on trailing yield when comparing three funds — but remember a high trailing yield can be mechanical: if price drops and dividends lag, yield rises without the fund being cheaper.
P/B ratio and what it signals
The price-to-book ratio "compares a company's current market value to its book value." For an FII, book value is NAV per quota. A P/B above 1 means the market expects value beyond assets; well below 1 implies a discount, which can reflect deteriorating assets P/B ratio (Wiki). Wikipedia notes P/B "does not directly provide information on the ability of the firm to generate profits or cash for shareholders" — a fund at 0.8x NAV is not automatically a buy if vacancy is rising.
Vacancy and concentration
For brick funds, vacancy rate is the leading indicator of future cuts. A logistics fund with one tenant is far more exposed than one with twelve; a single lease loss can zero rent overnight. Paper funds have a parallel risk: issuer concentration of their CRI portfolio. Both affect distribution sustainability.
Liquidity
Because FIIs are closed-end with indefinite duration, the only exit is selling on B3. Average daily trading value over 30 days tells you whether you can exit without moving the price. Low-liquidity funds show wide bid-ask spreads — an invisible cost the quoted yield ignores FINRA order types.
Comparator Snapshot
Values are rounded; verify with the latest fund reports. Items marked "illustrative" are not sourced from a single live quote.
| Metric | KNRI11 (Brick) | MXRF11 (Paper) | HGLG11 (Brick) | Source |
|---|---|---|---|---|
| Category | Brick | Paper | Brick | Bora Investir |
| Monthly distribution | R$ 0.10/share | R$ 0.05/share | R$ 0.11/share | Illustrative |
| Trailing dividend yield | ~7% | ~10% | ~8% | Dividend yield (Wiki) |
| P/B (price/NAV) | ~1.0x | ~1.0x | ~0.95x | P/B ratio (Wiki) |
| Physical vacancy | Low | N/A (debt) | ~5% | Illustrative |
| Tenant / issuer concentration | Medium | High (few CRIs) | Low (multi-tenant) | Illustrative |
| 30-day avg. trading value | Medium | High | High | Illustrative |
| Income tax on distributions | Exempt* | Exempt* | Exempt* | B3 FII page |
| Capital gains tax on sale | 20% | 20% | 20% | gov.br Portal do Investidor |
*Exempt for individuals when the fund meets the 50-quota-holder, exchange-only, and less-than-10% holding requirements.
How to Interpret Each Row
Yield: MXRF11 prints the highest number
MXRF11's ~10% trailing yield reflects its paper strategy: CRIs pay floating interest indexed to the CDI plus a spread, which rises when the Selic rises Dividend yield (Wiki). When the Selic falls, CRI coupons fall with a lag, and the distribution shrinks. Compare this yield only against other paper funds; setting it beside a brick fund conflates strategy with valuation.
KNRI11 and HGLG11 both pay rent-based distributions. The difference between ~7% and ~8% is less about strategy and more about contract structure and vacancy. Wikipedia warns a high trailing yield can "reflect a higher payout, a lower share price, or expectations that dividends will be reduced" Dividend yield (Wiki).
P/B: discounts to NAV are signals, not gifts
All three trade close to NAV, normal for established FIIs. HGLG11 at ~0.95x suggests a small liquidity or sentiment discount; whether that is a buy depends on vacancy. P/B "does not directly provide information on the ability of the firm to generate profits or cash for shareholders" — pair it with tenant concentration before reading it as cheap P/B ratio (Wiki).
Vacancy and concentration: where cuts come from
MXRF11 has no physical vacancy (it owns no real estate) but carries issuer concentration. If one or two homebuilders default, the distribution drops B3 FII page. For brick funds, physical vacancy and tenant count are the equivalent risk. HGLG11's multi-tenant portfolio means a single lease loss does not zero the rent roll — an advantage over a concentrated brick fund.
Liquidity: can you actually exit?
MXRF11 and HGLG11 trade in higher volume than KNRI11, meaning tighter spreads and lower slippage. FINRA's order-type guidance applies to FII trading on B3: a limit order protects against wide spreads in illiquid names, while a market order on a thin book can fill far from the last quote. Check 30-day average financial volume before treating a quoted yield as achievable FINRA order types.
Step-by-Step: Run This Comparator Yourself
- Group by category. Brick with brick, paper with paper. Mixing categories distorts yield and P/B.
- Compute trailing yield as 12-month dividend per quota divided by current price, from each fund's monthly report Dividend yield (Wiki).
- Compute P/B as price divided by NAV per quota from the latest report.
- Read the vacancy / concentration row for each fund.
- Check 30-day average trading value on B3; below your threshold (e.g., R$ 500k/day), treat the spread as a cost FINRA order types.
- Verify tax treatment with the B3 product page and CVM Resolution 175.
For the math behind each ratio, see price-to-book and ROE primer; for tax rules, see FII taxation rules.
Common errors and fixes
| Error | Cause | Fix | Source |
|---|---|---|---|
| Comparing brick and paper funds by yield only | Strategy drives payout, so the ratio conflates structure with value | Compare within the same category first | Bora Investir FII glossary |
| Treating a high trailing yield as a bargain | Price fell but dividends lagged; distribution may be cut next | Check forward/indicated yield and the most recent declared dividend | Dividend yield (Wiki) |
| Ignoring physical vacancy in brick funds | Rent is the income source; vacancy is the leading cut signal | Read the occupancy section of the monthly report | B3 FII page |
| Buying a low-liquidity FII at market order | A wide spread fills far from the last quote | Use a limit order and check 30-day average trading value | FINRA order types |
| Assuming all distributions are tax-exempt | Exemption depends on 50+ holders, exchange-only trading, less-than-10% holding | Confirm the conditions before relying on exemption | gov.br Portal do Investidor |
| Using P/B alone to call a fund cheap | P/B says nothing about cash-generation ability | Pair P/B with vacancy, tenant concentration, and ROE | P/B ratio (Wiki) |
FAQ
What is a good dividend yield for an FII?
No universal number. A brick FII yielding 7-9% and a paper FII yielding 9-12% can both be fair given strategy and the Selic rate. Wikipedia notes yield "is distinct from total return" and a high yield can signal an upcoming cut — compare within category and check forward/indicated yield Dividend yield (Wiki).
How often do FIIs pay distributions?
Most distribute monthly; some quarterly or semiannually. Frequency is defined in the fund's regulation. B3's product page states distributions are periodic; the exact cadence is fund-specific.
Can I lose money in an FII?
Yes. Quota prices fluctuate with property valuations, rates, and supply/demand on B3. A fund with indefinite duration cannot be redeemed — you only exit by selling, and illiquid funds can trade at a discount to NAV. Capital loss is possible; gains on sale are taxed at 20% gov.br Portal do Investidor.
What is the difference between a brick FII and a paper FII?
Brick FIIs (Tijolo) own physical real estate and earn rent; paper FIIs (Papel) own CRIs, LCIs, and other real-estate debt and earn interest. Bora Investir's glossary describes brick funds as buying properties for rent and paper funds as targeting real-estate debt instruments.
Is FII income really tax-free for individuals?
Distributed income is exempt when the fund has 50+ quota holders, trades only on an exchange, and no holder owns 10%+. Capital gains on sale are taxed at 20% flat, with no cross-asset loss offset. Verify via gov.br Portal do Investidor gov.br Portal do Investidor or CVM Resolution 175 CVM Resolution 175.
How do I compare an FII to a U.S. REIT?
Both are exchange-traded real-estate vehicles. FIIs follow CVM Resolution 175 and distribute monthly with the individual exemption above; REITs follow U.S. tax rules and typically distribute quarterly. Nareit (REIT.com) describes REITs as companies that "own or finance income-producing real estate" — the closest U.S. analogue REIT.com.
What liquidity threshold should I set?
Pick a 30-day average financial volume that lets you exit your position without moving price. A common rule: hold a position no larger than 1% of 30-day average trading value. Below that, use limit orders only — FINRA notes market orders on thin books fill unpredictably FINRA order types.
Should I hold just one FII or several?
Concentration in one fund exposes you to its tenant, sector, and manager risk. A comparator is the first step in building a basket across categories. Diversifying across brick, paper, and hybrid funds reduces the chance a single lease expiration or issuer default cuts your entire stream.
Sources
- B3 — Fundos de Investimento Imobiliário (FII): official product page defining FIIs, trading characteristics, and the individual tax-exemption conditions.
- Bora Investir — Fundo de Investimento Imobiliário (FII) glossary: taxonomy of FII categories (brick, paper, development, hybrid, funds-of-funds) and taxation details.
- gov.br Portal do Investidor — Fundos de Investimentos Imobiliários: investor education page citing Law 8.668/1993 and CVM Resolution 175/2022 as the regulatory basis.
- Wikipedia — Dividend yield: trailing, forward, and indicated yield conventions and the yield-trap caveat.
- Wikipedia — Price-to-book ratio: definition of P/B, NAV, and its limitations as a cash-generation signal.
- FINRA — Order Types: market vs. limit order guidance applied to FII liquidity and slippage.
- Nareit (REIT.com): industry definition of REITs as the U.S. analogue to FIIs.
- CVM — Resolution 175/2022: regulatory framework setting out FII governance, structure, and tax-exemption limits (50+ quota holders, exchange-only trading, less-than-10% concentration).