The Government hopes that the introduction of this fund will increase the liquidity and transparency of the securities at a lower cost.
The Ministry of Finance and the World Bank signed a cooperation agreement to take the first step in launching a sovereign debt fund in the local market (ID-ETF).
A stock market fund is a Collective Investment Fund whose purpose is to replicate or monitor an index, through the constitution of a portfolio or basket of assets and operates as a share on the stock market. Like any stock, the units of the stock market fund are listed and traded on the stock exchange.
ID-ETF is a global initiative designed by the World Bank to support the development of local bond markets and promote financial stability in emerging economies. It also seeks to democratize access to capital markets and increase competitiveness through financial services.
The Government hopes that the introduction of this fund will increase the liquidity and transparency of the securities at a lower cost, improving price discovery and diversifying the investor base.
Anderson Caputo Silva, Global Manager of the World Bank’s Long-Term Finance unit, noted that “We are proud to have reached this important phase in our collaboration with Colombia as part of our global issuer-driven ETF program. The World Bank expects to work with Finance to launch the issuer-driven ETF in the coming months; this will be a significant addition to the ministry’s ongoing debt management strategy and local capital markets development goals. “
