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Opening doors to greater value via UCITS ETFs

UCITS ETFs are exchange traded funds domiciled in European markets and as such are subject to the UCITS regulation. For investors in Latin America and other markets, this is a growing platform offering expanded investment options and improved portfolio efficiency.

UCITS ETFs platform

The UCITS ETFs platform has seen tremendous growth in recent years, partially fueled by the demand from Latin American investors.
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Growing industry
$800 bn in AUM in the UCITS ETF industry. 1
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Breadth of choice
More than 350 ETFs available.
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Regional trend
47% of Latin American Institutional investors are using UCITS ETFs. 2

Why are Latin American investors accelerating their adoption of UCITS ETFs?


Taxes can be a complicated matter. In certain cases, UCITS ETFs offer potential tax benefits in comparison to U.S. domiciled funds, such as preferential withholding or estate tax rates for non-U.S. investors.

For example: Investors who suffer up to 30% withholding tax rate on distributions from US domiciled ETFs are typically able to retain higher levels of income through Irish domiciled ETFs. Note that the tax withheld on the underling exposure will fluctuate depending on the exposure, sometimes to the benefit of the Irish ETF.3

Potential tax benefits

3This section provides some broad factual information and does not represent tax advice. The tax treatment of an iShares ETF, relevant tax laws, rates, and tax reliefs may change, while the tax impact to an investor from investing in units of iShares ETFs will ultimately depend upon an investor’s own tax circumstances. This material does not constitute any specific legal, tax or accounting advice. BlackRock strongly recommends that all investors seek specialist tax advice from their own advisors.

 As European ETF adoption has accelerated, trading volumes and liquidity have grown significantly across the industry. ETFs are being relied upon more by investors, particularly during fast moving markets.

Alongside increasing volumes, trading costs (bid/ask spreads) are compressing, driven by increased usage and an improving European market structure.

Ecosystem developments such as: ETF lending, ETF options markets, MiFID II, ETFs displacing derivatives and more centralized clearing, are accelerating liquidity depth even further.

Chart: Deepening market liquidity

The European ETF platforms provide investors with great choice. The UCITS directives allow for certain flexibilities in portfolios, such as multiple share classes or variable income treatment resulting in both accumulating and distributing ETF options. Accumulating ETFs can provide both operational and tax efficiency to portfolios.

Additionally, certain exposures are available in the UCITS market which are not available in the US, such as European sectors, single country government bond funds, or Thematic ETFs that allow investors to access new parts of the market like Automation & Robotics, Ageing Populations, and Digitalization.

Unique features & exposures

Explore BlackRock Model Portfolios built with UCITS ETFs

Our Target Allocation Model Portfolios are all-in-one core portfolios seeking long-term growth to capital preservation

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Tips from our Markets Coverage team

Did you know that there are simple functions on your terminal to see the liquidity of ETFs listed on European exchanges?

Check out our monitors to the right!

Tips from our Markets Coverage team