B3 is now trading a new Ibovespa indexed ETF, the BOVB11 (ticker). The product was developed by Bradesco Asset Management (Bram) and enabled by the B3 trading platform.
The new product replicates the portfolio of Ibovespa, Brazil’s main stock index, which reflects the theoretical portfolio comprised of stocks and units of companies listed on B3 that meet the criteria described in its methodology, accounting for about 80% of the number of trades and the financial volume of the Brazilian capital markets. ETF shares are traded on B3 in a similar manner to stocks.
However, when acquiring ETF shares, the investor indirectly holds all the stocks that comprise the theoretical portfolio of the reference index. Therefore, the ETF provides diversified investment in a more efficient way.
"Our economy is undergoing an adjustment process. The trend in falling interest rates underscores the need for greater diversification, and investment in ETFs tends to get increased space in the Brazilian financial market. In this context, Bradesco with its strategic outlook is always seeking excellence and innovation. We always want the best for our customes,” says Ricardo Almeida, Bradesco Asset Management CEO.
According to B3 CEO Gilson Finkelsztain, the ETF is "an affordable product that caters to all types of investors. That’s why it’s becoming increasingly popular in a low interest rate scenario like today’s."
The ETF provides a number of benefits to investors, among which: liquidity, as it is an exchange-traded product it can be bought and sold as if it were a stock; diversification, with just one transaction the ETF provides investors with a diverse portfolio of financial products; and transparency, through the daily disclosure of the index portfolio composition and stock price formation.