In a key move in the Brazilian investment market, Nubank (NYSE:NU) announces the launch of the first ETF (exchange-traded fund) in Brazil that pays monthly dividends to shareholders: Nu Renda Ibov Smart Dividendos (NDIV11).
The new product results from “a partnership between Nubank’s investment fund manager, Nu Asset Management, and B3, the Brazilian stock exchange, and is now an option for any investor without any mandatory affiliation with Nubank or its broker, NuInvest.”
Therefore, any individual – upon suitability assessment “with the affiliated broker – or institutional investor can invest in the new ETF.”
The partnership between Nu Asset and B3 was established “to create the innovative Ibovespa Smart Dividendos B3, the first derivative index of the Ibovespa B3.” The new index will “include companies from Ibovespa that stand out in dividend payments to shareholders.”
The index considers companies “from Ibovespa B3 that pay the highest dividends relative to the share price.” This criterion will also be used “to weigh the stock’s importance in the portfolio, in addition to the recurrence and lower variations in dividend payments.” This means that the companies that consistently “pay higher proportional values over the years will have more weight in the portfolio.”
The development of ETF offerings in Brazil “follows a trend already observed on a global scale.”
The globally invested volume “in ETFs has shown a 20% annual growth over the last two decades, with approximately USS 10.6 trillion (approximately R$ 53 trillion) under management as of July 2023,” according to data collected by ETFGI, an independent research and consulting platform for ETFs.
In the Brazilian stock exchange alone, the invested volume “in ETFs was nearly R$ 45 billion in August, according to B3’s Monthly ETF Bulletin.”
Andrés Kikuchi, executive director of Nu Asset Management.
“With this new product, Nubank takes the leading role in the evolution of exchange-traded funds in Brazil. The unique formula of paying dividends through the investment in ETFs and the partnership with B3 for the development of Ibovespa Smart Dividendos B3 combines the innovation DNA that has marked our trajectory in the last 10 years and the efficiency desired by investors.”
Beyond Nu Renda Ibov Smart Dividendos (NDIV11), Nu Asset is “launching another ETF replicating the Ibovespa Smart Dividendos B3 index: Nu Ibov Smart Dividendos (NSDV11). It differs from the first one by reinvesting the dividends in the ETF itself. NSDV11 is equally available to any investor (individual or institutional).”
The initial minimum investment amount “for both Nubank’s ETFs is R$ 100, corresponding to one share, and it may vary over time according to the index’s fluctuations. NDIV11 and NSDV11 have a 0.5% annual administration fee, with no performance fee charges.”