ETF is an investment fund traded on the stock exchange that usually follows a market indicator. Because it is traded on the exchange and follows an index, the management fee tends to be lower than that of traditional funds, which can result in higher returns for the investor. However, it is necessary to pay a brokerage fee to invest and redeem, which should be considered in financial planning.
There are two main types of ETFs: variable income and fixed income. The two largest ETFs in Brazil are variable income, namely BOVA11, which follows the Ibovespa, and IVVB11, which follows the United States stock exchange index. Every ETF has a trading code composed of four letters followed by 11.
The main fixed income ETFs follow indicators such as the IMAB or Treasury Selic, which are indicators of the public securities market. In terms of security, fixed income ETFs that invest in Treasury securities are considered as safe as investing directly in Treasury.
