Radar Perene / Archive / concept

What is contracted income?

◦ Written under index methodology v1 (in effect until 15 Jul 2026). The current series is v2 — readings quoted here may differ from those shown today. See the methodology.

Concept

In the Radar's vocabulary, contracted income is the block of assets whose revenue does not depend on the mood of the cycle — it has already been signed. Regulated tariffs in power and sanitation, property rents, funds and paper indexed to rates or inflation: in all of them, the cash flow is born of a contract, not of a bet on growth. The cyclical gets paid if the economy turns; contracted income gets paid because it signed.

Why capital seeks it. Two pushes, almost always together. The first is the interest rate: when the policy rate rises, the income already written into the contract starts competing on equal terms with equities — the investor does not need to believe in anything to get paid. The second is conviction: when it runs short, capital does not abandon the market; it changes queues. It prefers the guaranteed flow to the promised one.

How it shows up in the house's readings. Contracted income rarely makes the headline — it reveals itself in the relative ratios. Utilities gaining ground against the index; the bricks of the real estate funds firming up against the stock market; cyclicals ceding space to defensives. When several of these ratios point the same way for weeks, the archive usually records a rotation: the money left the promise of growth and settled into the contract. In high-rate periods, it is one of the patterns that most often returns to the relative picture.

What it says — and what it does not. The migration into contracted income is a thermometer of appetite, not a verdict on quality. It describes where capital takes shelter when rates weigh or confidence runs thin — never where anyone "should" be. And the shelter has a price of its own: contracts are also repriced when rates change direction.

What it is not. It is not a synonym for fixed income, nor a guarantee of stability. The contract protects the flow; the fund share and the stock keep swinging on the screen.

Related episodes: in June 2026, the Daily caught the character on stage — "contracted income competes on equal terms with equities" (June 17, 2026). See also: Bricks against paper (IFIX × IBOV) · The refuge premium (2021) · The brick the CDI swallowed →

Read also: Cyclicals vs defensives: the duel that reveals appetite · IFIX vs. IBOV: when bricks only rise because paper collapses · Rates (the Selic) in the Radar: the backdrop of the regimes · The refuge premium: utilities only pay when growth is called into question · The brick didn't lose. It was swallowed.

Characters: Contracted income