An Update On Investing In Brazilian Exchange Traded Funds

Brazilian Exchange Traded Funds (ETFs) are equity investment funds structured as open-ended funds that track indices traded on the Brazilian Exchange (BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros - BVMF). The incorporation, administration and operation of ETFs is governed by CVM Instruction No. 359, of January 22, 2002, issued by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários - CVM). The Portuguese expression used in Brazil to designate ETFs is Fundos de Investimento em Índice de Mercado (Market Indices Funds) or Fundos de Índice (Indices Funds).

The shares of an ETF are known as quotas (units). The units of the ETFs are traded on the BVMF just like shares¹. When acquiring units in an ETF, the investor holds the entire range of shares in the linked or reference index (the Underlying Index) without having to buy separate shares in each company. In this manner, ETFs offer greater practicality, speed and flexibility when