B3 has traded the first Fixed Income ETF in Brazil. The product was developed by Mirae Asset Global Investments along with the index provider S&P Dow Jones Indices and was enabled by the B3 trading platform. The product will follow the S&P/B3 Fixed Income Index, which will measure the performance of a hypothetical portfolio holding three-year DI futures contracts
ETF shares are traded on B3 in a manner similar to stocks. When acquiring ETF shares, investors indirectly hold all the fixed income assets in the theoretical portfolio of the benchmark index. Therefore, the ETF provides more transparency and liquidity to diversify their investments and requires low initial investment.
The B3 and Mirae partnership offers brokerage houses and banks another product focused on institutional investors (asset firms, foundations and foreign investors) and individual investors.
According to Felipe Paiva, B3’s Customer Relationship Brazil director, “the Fixed Income ETF will contribute even more to our challenge of consolidating financial education in Brazil.” Furthermore, it brings a number of benefits, such as low investment, since it is affordable to all investors; liquidity, since it is exchange traded it can be bought and sold as if it were a stock; diversification, by means of a single transaction the ETF provides investment opportunities in a diverse portfolio of financial products; and transparency, price formation in the stock market allows investors to monitor the exact composition of their portfolio on a daily basis.
“We must continue to put forward a development agenda for the Brazilian market, and with the Fixed Income ETF, Brazil will be in line with the investment platforms of the main financial and capital markets industries worldwide,” adds Paiva.