Bonds Are Back and Brazil’s Yield Stands Out

As U.S. Treasury supply and AI borrowing grow, investors are looking again at yield, duration and risk

Bond yields are back in the headlines—and for good reason.

U.S. 30-year Treasury yields recently moved above 5%, as investors questioned inflation, fiscal deficits and who will absorb the growing supply of government debt. The U.S. Treasury expects to borrow $739 billion in privately held net marketable debt in the third quarter alone.

At the same time, AI is becoming a bond-market story. Hyperscalers are expected to spend approximately $725 billion on AI infrastructure this year. Amazon and Alphabet have already issued around $60 billion in bonds across multiple currencies over the past 12 months. The AI buildout is increasingly being funded not just through cash flow and equity—but through debt.

As U.S. 30-year Treasury yields push past 5%, income investors are looking south to Brazil’s Double-digit yields

Brazil’s Selic rate is currently 14%, compared with roughly 2% at the beginning of 2021. But high Brazilian bond yields are not a free lunch, or directly comparable with a U.S. Treasury yield. Investors are taking Brazilian real, inflation, fiscal and sovereign risks. If Brazilian rates fall, floating-rate income may also reset lower.

 That makes index construction especially important. The objective should not simply be to reach for the highest yield or the longest maturity. It should be to capture Brazil’s high local interest rates while managing how much interest-rate sensitivity the portfolio takes.

The MarketVector™ Brazil Treasury 760 Day Target Duration Index (MVLFTB) provides a rules-based solution.

The index combines eligible floating-rate Brazilian Treasury bonds, known as LFTs, with an allocation to the longest-maturity inflation-linked NTN-B. As of September 4, 2026, MVLFTB had an average yield to maturity of 13.32% and an average modified duration of only 1.22 years. MVLFTB is designed to capture Brazil’s high local interest rates while taking a more measured approach to interest-rate sensitivity than a traditional long-duration bond strategy.

For markets debating 5% U.S. Treasury yields and how to finance a $725 billion AI investment cycle, Brazil’s combination of double-digit yield and shorter duration deserves another look.

Table 1: MarketVector™ Brazil Treasury 760 Day Target Duration Index (MVLFTB) Maturity Breakdown

The table shows maturity breakdown of the index components. The data are updated on a daily basis.

Source: MarketVector™ Brazil Treasury 760 Day Target Duration Index, data as of September 15, 2026

For more information on MarketVector Indexes, visit www.marketvector.com.  

 

About the Author(s):

Joy Yang is the Head of Product Management and Marketing at MarketVector Indexes^™ (“MarketVector”). She is responsible for managing MarketVector products and services to accelerate innovation in financial index design and adoption. Joy brings more than 25 years of investment experience to MarketVector, having led teams delivering index and quantitative-active investment solutions at Arabesque Asset Management, Dimensional Fund Advisors, Vanguard, Aberdeen Standard Investments, AXA Rosenberg, and Blackrock. She has an MBA from the University of Chicago Booth School of Business and a Bachelor of Science in Electrical Engineering from Cooper Union’s Albert Nerken School of Engineering.

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