Five months after Nubank (NYSE: NU) launched its first index funds (ETFs) through its investment fund manager, Nu Asset, Nu Renda Ibov Smart Dividendos (NDIV11) and Nu Ibov Smart Dividendos (NSDV11) have already “accumulated R$57 million in investments, with R$23 million in NSDV11 and R$34 million in NDIV11.”
From the beginning of October to the end of February, the funds have had “a total of 13,000 investors and have the best-accumulated return among all ETFs of shares of Brazilian companies listed on the local stock exchange.”
In addition, the ETF outperformed the Ibovespa, “the most well-known index in the national market, in every month so far, demonstrating that the methodology developed together with B3 has been proving to be correct.”
NSDV11 stands out as the best option in “the Brazilian ETF market in terms of return since its launch, with 17.10% net return after management fees and costs.”
This result surpasses the 36 ETFs with “a strategy based on shares of Brazilian companies listed on the local stock exchange.”
In addition, the product presented the lowest volatility in the period, with the highest “information ratio” – a metric used to analyze the return of an investment portfolio – which demonstrates quality “in the construction of the index and efficiency in the allocation.”
The ETF, which automatically “reinvests dividends, has 4,300 investors and is the 8th largest in the Brazilian ETF market in terms of number of investors, 4th largest in terms of fundraising with R$10 million since the launch of the product.”
NDIV11, in turn, is a pioneer in the Brazilian market “by offering monthly dividend payments, which always happens on the 10th business day of the month, bringing predictability of payment date – yet another Nubank exclusivity to benefit investors seeking passive income.”
The ETF yielded 14.16% in the period, in addition “to distributing R$3.32 per invested share (not considering the dividends for the fifth month, which will be paid on March 10), equivalent to a dividend yield of 2.53% (or 6.2% per year).”
With over 9,000 investors, NDIV11 consolidated itself “as the 5th largest ETF in the market in terms of number of investors, with the 3rd largest fundraising since its launch, totaling R$22 million. In total, more than R$640 thousand have already been paid to investors in the form of monthly dividends, also referring to the first 5 months.”
Andrés Kikuchi, CEO of Nu Asset Management, said:
“One of our main goals is to develop assertive solutions that focus on meeting the needs of investors. ETFs have high potential and are great products for those looking to diversify their portfolio with a basket of stocks that has already been curated, managed and transparent. This is a market that represents US$10 trillion in investments worldwide, and that is just beginning in Brazil. In order for it to continue growing, we need to develop innovative products that are tailored to the investor. That’s what we sought to do and, not by chance, in just 5 months, our assets have already consolidated themselves among the most promising in Brazil.”
The two ETFs are benchmarked to the Bovespa Smart Dividendos B3 index, which was developed “in partnership between NU and the Brazilian stock exchange.”
The index considers Ibovespa B3 companies “that have maintained a consistent dividend payment history over the past 6 years.”
This criterion is also used to weight the stock’s weight “in the portfolio, in addition to the recurrence and lower oscillation in the dividends paid.”
This means that companies that pay higher proportional amounts, “with constant frequency and value over the years, have a greater weight in the portfolio.”
The results of Nu Asset’s ETFs reinforce “the institution’s commitment to providing innovative and easy-to-understand solutions for investment strategies for investors of all profiles, solving their main pain points. NDIV11, for example, does this by standardizing the receipt of dividends, eliminating the need to track multiple payments of smaller amounts on different dates.”
Today, the minimum initial investment “in NDIV11 is R$112.7 and in NSDV11 is R$115.55 (values subject to asset variation), which corresponds to a share that can be purchased through several investment platforms without the need to be linked to Nubank.”
Both individual investors, subject to suitability assessment “by the brokerage firm they are affiliated with, and institutional investors can invest in the indexes.”