Insights from the 2017 ETF
Desk Reference

21 sep 2017
por BlackRock

The first comprehensive ETF guide for Latin America investors highlights how institutions are using ETFs across asset classes to improve portfolio outcomes and showcases the breadth of our
institutional services and tools.

Growth of the ETF industry

As uncertainty emerges as the new normal in markets, ETPs (Exchange traded products) have become more appealing due to their simplicity, transparency and lower cost. Global ETPs flows showcase the tremendous growth the industry has seen in the past decade, reaching the $3 trillion mark at the end of 20161.

Global ETP Landscape

Chart: Growth of the ETF industry

Source: BlackRock, Markit, as of 12/31/16. ETPs include exchange traded funds (ETFs) registered with the SEC under the Investment Company Act of 1940 (open-end funds and unit investment trust or UITs) and certain trusts, commodity pools and exchange traded notes (ETNs) registered with the SEC under the Securities Act of 1993.

ETF investment trends

As ETF adoption continues to grow globally among institutions, their use as both strategic and tactical tools in the Latin America region is also expanding. The ETF Desk Reference explores the five investment trends are shaping the way Latin American Investors are using ETFs:

  1. The rise of factor investing
    Adopting a factor lens is helping investors better understand their portfolios and improving risk-adjusted returns. In Latin America, 50%2 of institutional ETF investors are employing Smart beta ETFs.
  2. Solving fixed income challenges
    30%2 of Latin American investors are using Bond ETFs as they act as a portfolio management tool to help navigate trading challenges.
  3. Accessing global investment opportunities
    International diversification leads the ranking of reasons for using ETFs for Latin American investors with 28%2.
  4. Increasing appetite for ETFs among derivatives investors
    Investors seeking index exposure are increasingly finding that ETFs can be an efficient, straightforward alternative to derivatives. In Latin America, 67%2 replaced derivative products with ETFs in the last year.
  5. The growing adoption of UCITS ETFs
    25%2 of Latin American investors have already turned to European Domiciled ETFs given the potential tax efficiency, availability of cumulative ETFs and niche exposures.

Read more about these trends, discover case studies and learn more about our institutional services and tools in the ETF Desk Reference.