OREANDA-NEWS. May 10, 2012. Caixa Economica Federal won the bidding process that BM&FBOVESPA held to license use of the BOVESPA Index for a new ETF based on IBOVESPA. The Exchange opened the proposals and announced the results of the process. Three institutions participated.

The Index Licensing Agreement shall be signed within the next 15 days. After the Securities and Exchange Commission of Brazil (CVM) and BM&FBOVESPA grant the due authorizations for the functioning and registration of a new ETF based on IBOVESPA, Caixa Economica Federal will have 30 consecutive days to start trading the new ETF on the Exchange. The ETF based on the IBOVESPA reflects the performance of the 68 most traded stocks on BM&FBOVESPA.

ETFs are index funds traded on the Exchange like stocks and which replicate the composition of an index. An investor that buys a unit in an ETF is making a simultaneous investment in a share portfolio composed of companies in different sectors of the Brazilian economy, without having the buy the separate shares of the respective index.

Generally speaking, round lots are made up of 10 units with a management fee of under 0.75% and require an initial minimum investment that ranges from BRL 200 to BRL 1,000 (depending on the ETF that the investor selects), plus brokerage and custody fees. In April, the ETFs traded on BM&FBOVESPA totaled 73,632 transactions and a financial volume of BRL 2.69 billion.