B3 begins trading the first inflation-linked Fixed Income ETF in Brazil

São Paulo, May 20 2019 –  As of today, B3 begins trading the first inflation-linked Fixed Income ETF in Brazil, the IMAB11 (ticker). The product was developed by Itaú Asset Management with the support of the National Treasury and collaboration of the World Bank. It is enabled on the B3 trading platform.

The IMAB11 replicates the portfolio of  IMA-B, the Anbima Market index that reflects the theoretical portfolio of inflation-linked Brazilian government bonds (effective interest rate). ETF shares are traded on B3 in a similar manner as stocks.

However, when buying these shares, the investor indirectly holds all the fixed income assets that make up the theoretical portfolio of the reference index. Therefore, the ETF provides a diversified investment in a more efficient way.

To Gilson Finkelsztain, B3 CEO, the partnership offers brokerage houses and banks another product focused on institutional investors (asset managers, foundations and foreign investors) and individual investors. "B3 sees great potential in the ETF market. With this in mind, in recent years we have been working on various initiatives to boost the launch of fixed income ETFs at B3. Borrowing and accepting shares as collateral are projects foreseen in our product roadmap for this year," says Finkelsztain.

Fixed income ETFs bring a number of advantages to investors, such as liquidity, since a stock exchange traded ETF can be bought and sold as if it were a stock; diversification, with just one trade the ETF provides the investment with a diverse portfolio of financial products; and transparency, with daily disclosure of the ETF portfolio holdings and stock price formation.

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