This article evaluates which fixed income investment is more advantageous for individual investors: government bonds purchased through the Tesouro Direto (TD) platform or fixed income Exchange Traded Funds (ETFs). The analysis compares ETFs that track a benchmark index with TD bond portfolios matched by duration, taking into account various costs such as management fees, brokerage fees, and tax implications. The findings show that ETFs with an average portfolio reset term (PMC) longer than 720 days — and therefore subject to the lowest income tax rate — deliver superior net performance compared to TD bond portfolios. Conversely, when the benchmark is the policy interest rate (PMC of 1 day), TD portfolios outperform. Taxation is a key factor in this comparison: capital gains and losses within ETFs can be offset for tax purposes, unlike TD investments, and reinvestment of redemption proceeds in ETFs does not trigger immediate taxation.