REAL11: How XP's New ETF Works on the B3

What Is the REAL11 ETF and How Does It Work?

The REAL11 ETF is an index fund launched by XP on the B3 designed to combine the Selic benchmark interest rate with exposure to the Brazilian real and the interest rate differential between markets. As reported by InfoMoney, the product aims to give investors access through a single exchange-traded ticker to a strategy traditionally restricted to institutional trading desks and currency derivatives.

Rather than simply buying floating-rate government bonds like the traditional Tesouro Selic, the vehicle integrates instruments that reflect both the nominal yield of domestic interest rates and the relative movement of the real against major currencies. In practice, this operationalizes a well-known concept in global macroeconomics: capturing the foreign exchange coupon and carry trade operations.

XP's initiative expands the menu of funds listed on the B3, creating an alternative that unites exchange liquidity with direct exposure to the performance of the national currency against current interest rates.

Why Combine Selic and Currency in a Single Product?

The economic logic behind the product stems from the interest rate differential between Brazil and developed economies. When Brazilian interest rates remain elevated relative to rates in the United States or Europe, the real tends to attract capital flows seeking nominal returns, a dynamic known as rate arbitrage.

According to InfoMoney's coverage of XP's launch, the ETF's structure seeks to capture this relationship without requiring investors to trade complex futures contracts in the derivatives market. The structure packages these flows to deliver a return linked to floating-rate yields combined with currency parity fluctuations.

For everyday investors, the main practical difference compared to a classic DI fund lies in the additional volatility that the currency component introduces into the daily unit price.

What Scenarios Help or Hurt REAL11?

The product's performance will depend directly on the simultaneous trajectory of the benchmark interest rate and the relative appreciation of the real. In scenarios where Brazil maintains attractive interest rates alongside fiscal stability and dollar inflows, the thesis benefits from both the yield and the strengthening of the currency.

On the other hand, episodes of sharp global risk aversion, capital flight, or domestic macroeconomic deterioration can impact the portfolio's currency component, even if the Selic rate remains high.

Pros and Cons of the ETF for Retail Investors

Evaluating the product requires weighing operational convenience against exposure to macroeconomic factors that do not exist in pure floating-rate investments. Distribution via the exchange democratizes strategies that previously required institutional accounts or high margin requirements, but it demands an understanding of the instrument.

• Simplified access: Provides exposure to currency and interest rate strategies on the exchange without the need to set up complex futures or currency swap positions.
• Carry potential: Capitalizes on periods when Brazilian interest rates are high relative to the rest of the world, maximizing capital returns.
• Capital fluctuations: Lacks the linearity of a daily liquidity CDB or a traditional Tesouro Selic bond.
• Taxation and costs: As an exchange-traded fund, it follows specific ETF tax rules that require attention to capital gains reporting upon sale.