BM&FBOVESPA starts trading in dividend and basic materials ETFs

BM&FBOVESPA starts trading in dividend and basic materials ETFs

31/01/2012

BM&FBOVESPA starts trading today in two new ETFs: the IT Now IDIV (DIVO11) ETF, which tracks the Dividend Index, and the IT Now IMAT (MATB11) ETF, which tracks the Basic Materials Index. Itaú is the manager of the two new products.

The IT Now IDIV ETF, which tracks the Dividend Index, measures the performance of shares in companies that have the largest remuneration for investors in dividends and interest on own capital. The current dividend index portfolio is composed of 40 stocks.

The IT Now IMAT ETF tracks the Basic Materials Index and measures the performance of shares that are most representative of the packaging, wood and paper, miscellaneous materials, mining, chemicals, steel and metallurgy sectors. The current basic materials index portfolio is composed of 20 stocks.

When acquiring units in an ETF, the investor invests in a stock portfolio made up of companies in different areas of the Brazilian economy, without having to buy separate stocks in each of the firms that compose the respective index, thus significantly reducing cost. An ETF round lot is generally ten units and requires an initial minimum investment that varies, according to the investor’s choice of fund, from BRL 200 to BRL 1,000, on average, plus brokerage and custody fees. In 2011, the volume for the ten ETFs available for trading was BRL 12.11 billion, in 577,723 transactions executed on BM&FBOVESPA. This trading volume has been growing constantly, as ETFs are an excellent option for investors that wish to diversify their portfolios.

As well as the two new products, there are  ten other ETFs traded on BM&FBOVESPA: three for broad indexes (BOVA11, which tracks the Ibovespa; BRAX11, which tracks the IBRx-100; and PIBB11, which tracks the IBrX-50); five sector indexes (CSMO11, which tracks the consumer index; MOBI11, which tracks the real estate index, FIND11, which tracks the financial index; ISUS11, which tracks the Corporate Sustainability Index; and GOVE11, which tracks the Corporate Governance Trade Index), as well as two capitalization-weighted indexes  (SMAL11, which tracks the index of listed small caps; and MILA11, which tracks listed mid and large caps).