Is it possible to invest in B3 fixed income?
Is it possible to invest directly in B3 fixed income?
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If you are starting to invest, you have probably already wondered if it is possible to invest directly in B3 fixed income.
This is a very common question for those who are starting to study financial applications.
With this in mind, we created an article to answer your questions on the subject.
To learn more, continue reading.
What is B3?
B3 is the acronym for the Brazilian stock exchange.
Represents a publicly traded company, headquartered in the city of São Paulo.
B3, as we know it, was the result of the merger between the São Paulo Stock, Commodities and Futures Exchange (BM&F Bovespa) and the Central Securities Custody and Settlement Center (Cetip). The merger took place in 2017.
The stock exchange is the environment in which the stock trading and other financial assets, such as commodities, for example.
Such negotiations occur through a system called home broker.
How to invest in shares through B3?
To trade on the stock exchange, you must open an account with a stockbroker, which is a financial institution authorized to operate on the exchange.
When choosing a broker, you should evaluate the brokerage fees, the company's reputation in the market, the availability of reports, among other factors.
Opening an account with a brokerage firm is relatively simple.
Once your account is opened, you can make a transfer to the brokerage via TED or DOC, so that the funds can be used to purchase shares in which you wish to invest.
How to invest in fixed income?
Fixed income is a type of investment that offers predictable returns.
Basically, when you invest in a fixed income security, you are lending your money to the issuer.
In return, on the agreed date, you will receive the invested capital plus interest. The rate of return is set at the time of purchase.
To invest in fixed income, the best option is to open an account with a brokerage firm.
On the brokerage platform, you can find the available titles and information regarding each of them.
It is important to remember that you can invest in more than one fixed income security.
Each product differs in terms of profitability rate, liquidity, minimum investment value and redemption period.
Therefore, before you start investing in fixed income, carefully observe each of these factors to find out whether the investment is aligned with your profile, objectives and financial reality!
What are the main fixed income investments?
Among the most common fixed income investments, we can mention:
• Direct Treasury: National Treasury program developed in partnership with B3 for the sale of federal public bonds.
• CDB (Bank Deposit Certificate): is a fixed income security issued by banks. In practice, when you buy a CDB, you are lending your money in exchange for an interest rate. The CDB, like letters of credit, is guaranteed by the FGC.
• LCI (Real Estate Credit Letter) and LCA (Agribusiness Credit Letter): fixed income securities exempt from income tax that raise funds for the development of the real estate and agribusiness sectors.
What is a B3 fixed income ETF?
An ETF is a type of investment fund.
But unlike other funds, ETFs replicate the composition of a market index.
In other words, a fixed income ETF is an investment fund traded on the stock exchange that follows fixed income market indexes.
This means that the portfolio is invested in public and private bonds in accordance with the reference index.
Blackrock debuts BDR of fixed income ETFs on B3
On February 14, 2022, BlackRock launched the first fixed income ETF BDRs on B3.
The option, for now, is only available for variable income.
Karina Saade, CEO of BlackRock in Brazil, said that the expansion is related to the maturation of the market, with young investors looking to diversify their assets.
The manager is launching six new BDRs in partnership with B3, which are linked to ETFs originally traded on the New York Stock Exchange and which track US government bonds.
ETFs (Exchange Traded Funds), as you already know, track a reference index, which in this case, is fixed income.
BDRs (Brazilian Depositary Receipts) are certificates that represent shares issued by companies in other countries.
In January, B3 began allowing the listing of fixed income ETF BDRs, as well as other new products.
ETF BDRs can now be traded by individuals.
Source: State
Is it better to invest in fixed income or variable income?
This is a very common question among investors.
After all, each category has different characteristics and yields.
Fixed income investments are known for their security and predictability. For this reason, they are highly sought after by conservative investors, i.e. those who do not want to take risks.
Variable income can bring higher returns. However, the risks are also greater, as is the volatility of the assets.
Both fixed and variable income have certain advantages and disadvantages.
To increase your earnings, it is important to create an asset diversification strategy so that you can find new investment opportunities and dilute risks.
In any case, the first thing you should do, before making an investment, is to understand your investor profile, which is basically an analysis that identifies your tolerance to risks and preferences in the world of investments.
In addition to the investor profile, It is important to set financial goals, analyze your current financial situation and, of course, study the investments that interest you most!
Conclusion
Now you know how B3 works, what fixed income is and the difference between this investment category and variable income.
We hope that through this article, you have understood what B3 is and how you can start investing in both fixed and variable income!
