2 Flute or O flute bit is what you want. I'd go with a 1/8" or 3/16" bit typically.
Bigger issue will be the hold down. .04" aluminum cuts fine in 1 pass with a decent machine. Holding letters down, especially smaller ones, can be tricky. If you don't have a really good vac setup, you're going to want to glue the material down to a spoilboard.