Brazil ETF Market Expansion
Brazil’s exchange‑traded fund (ETF) market has expanded rapidly, with total assets reaching approximately 116 billion reais (US$22.8 billion), almost three times the level two years earlier.
BTG Pactual Asset Management and Itaú Asset Management have both broadened their ETF offerings to meet rising demand. BTG’s ETF business grew to over 20 billion reais, up from about 1 billion reais at the end of 2024, while the VanEck‑backed Investo platform saw assets climb to more than 11 billion reais from 1.7 billion reais in nearly two years.
Fixed‑income ETFs in Brazil attracted over 27 billion reais of new investments this year. These products typically charge lower management fees and are exempt from the tax‑collection system that requires investors to pre‑pay income taxes twice annually, making them a tax‑efficient alternative to traditional fixed‑income funds.
The growth trend is not confined to Brazil. In Colombia, ETF listings increased 24% year‑on‑year, and in Chile, listings rose 37% over the same period.
Mexico’s ETF and exchange‑traded product assets expanded to US$15.3 billion, up from US$14.3 billion the previous year, according to ETFGI. Large institutional investors in Mexico are using these vehicles to gain exposure to overseas equity markets, particularly U.S. technology and artificial‑intelligence companies, as noted by Ignacio Saralegui, head of portfolio solutions for Latin America at Vanguard.
Mexico’s pension‑fund system, known as Afores, is also turning to ETFs for equity exposure. Principal Afore, which manages nearly US$26 billion, highlighted that thematic and actively managed ETFs are fueling this growth, according to chief investment officer Nestor Fernandez.
Overall, the surge in ETF assets across Brazil and the broader Latin American region reflects investor appetite for low‑cost, tax‑efficient products that provide diversified exposure to both domestic high‑yield debt and international equity markets.