*Source: Greenwich Associates, 2017 ETFs: A Versatile Tool for Institutional Portfolios
Find out why institutions across Latin America are turning to ETFs to seek opportunities and solve investing challenges across asset classes.
Methodology
Greenwich Associates interviewed 50 Latin American institutional investors for its 2016 Latin American study – the debut edition in this region of a global research program. The research sample for Latin America was composed of 19 asset managers, 17 institutional funds, and 14 insurers.
Thirty-six percent of study participants are located in Mexico and about a third in Brazil, with the remainder divided among Colombia, Peru and Chile. Nearly 40% of the institutions in the study have assets under management of $5 billion or more.
ETFs as versatile tools for institutional portfolios
The results of the 1st Annual Greenwich Associates Latin America ETF Research point to ETFs’ growing importance within institutions’ portfolio management toolkits as existing users broaden usage across asset classes to take advantage of the versatility and efficiency they can bring to their portfolios.
Five Trends Driving ETF Demand*
- Institutions are experimenting with new and innovative ETF fund structures to help them tackle challenges in their portfolios
More than 50% of institutions ETF investors invest in smart beta ETFs, and half of these plan to increase allocations within the next 12 months. Demand appears strongest for smart beta ETFs that help manage volatility. - Current impediments to investment will give way as institutions gain experience with ETFs
Factors such as internal investment guidelines and concerns about ETF liquidity and expenses have initially slowed the adoption of ETFs in other markets. These factors have eased over time as institutions saw early adopters using them safely and effectively. - ETFs are being viewed as a new class of financial instrument
Nearly 60% of institutions that use derivatives have replaced an existing derivative position with an ETF in the past year. - Demand for ETFs is being fueled by the growth in multi-asset funds
Approximately 40% of Latin American asset managers that invest in ETFs are using them in multi-asset funds and are investing 14% of total assets in ETFs. - UCITS ETFs will provide new opportunities for investment
Investors are beginning to initiate their first UCITS trades and are pleased by their benefits, including tax and operational efficiencies. As institutions become more familiar with ETFs and seek new ways to employ them, UCITS will become a larger part of the Latin American investment universe.
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U.S.ETFs: “Active” Tools for Institutional Portfo...
por Greenwich Associates / Q1 2017ETFs have become a mainstay within institutional portfolios alongside stocks, bonds and derivatives.
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EUROPEETFs: Dynamic Tools for European Institutions
por Greenwich Associates / Q1 2017Powerful market dynamics are causing European institutions to increase their use of ETFs.
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ASIAAsian Institutions Broaden ETF Applications
por Greenwich Associates / Q1 2017Current Asian institutional ETF allocations average over 17% of total fund assets.
Invertir implica riesgos, incluida la posible pérdida del capital.
For investors in Latin America and Iberia
For institutional investors and financial intermediaries only (not for public distribution). This material is for educational purposes only and does not constitute investment advice or an offer or solicitation to sell or a solicitation of an offer to buy any shares of any fund or security and it is your responsibility to inform yourself of, and to observe, all applicable laws and regulations of your relevant jurisdiction. If any funds are mentioned or inferred in this material, such funds have not been registered with the securities regulators of Brazil, Chile, Colombia, Mexico, Panama, Peru, Portugal, Spain Uruguay or any other securities regulator in any Latin American or Iberian country and thus, may not be publicly offered in any such countries. The securities regulators of any country within Latin America or Iberia have not confirmed the accuracy of any information contained herein. No information discussed herein can be provided to the general public in Latin America or Iberia. The contents of this material are strictly confidential and must not be passed to any third party.
Carefully consider the iShares® Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.blackrock.com/latamiberia. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal. Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences.
There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.
Shares of the iShares Funds may be sold throughout the day on the exchange through any brokerage account. However, shares may only be redeemed directly from a Fund by Authorized Participants, in very large creation/ redemption units.
The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective. This study was sponsored by BlackRock.
The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). BlackRock is not affiliated with Greenwich Associates, LLC, or its affiliates.
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