The Exchange Traded Funds In Brazil

The Exchange Traded Fund (ETF), also known as tracker, is an example of a rapid success story in the international market¹. This vehicle combines the diversification of a mutual fund with the flexibility of a stock. In Brazil an ETF (Fundo de Índice Negociado, in Portuguese) is an investment fund constituted under the applicable regulations of the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM), i.e. CVM Instruction No. 359, of January 22, 2002². A Brazilian ETF is structured as an open-ended fund, with units (quotas) traded on the stock market. An ETF is authorized for trading at BM&FBOVESPA (the main Brazilian Stock Exchange) like any other stock³, and its objective is to track the performance of a specific market index⁴.