BlackRock has expanded its iShares offering in Brazil by providing 37 additional ETFs for local investors.
The asset manager added 37 ETFs to its Brazilian product line through locally registered Brazil Depositary Receipts or BDRs. The country’s sole exchange operator B3 SA has been charged with their list, according to a Bloomberg article.
The new ETFs are mostly equity based and will provide local investors with access to industries such as aerospace and biotechnology, as well as sustainable strategies.
BlackRock already had five ETFs registered locally in Brazil prior to the latest addition.
That Bloomberg The article quoted Dominik Rohe, head of BlackRock Latin America, as saying that Brazil shows ‘tremendous potential’ for ETF adoption, citing their popularity among pension funds in neighboring countries.
“ In Brazil this is going to take time – it’s not something we hope will happen tomorrow or in a few months. For us this is a long-term plan, ‘said Rohe.
Brazilian investors have shown increased demand for international products as historically low local interest rates have prompted them to look for new ways to meet their demand for high returns. Rohe said he believes the ETF will help lower costs for local investors and provide greater cost transparency to the market.
However, so far ETFs have not been as accepted by Brazilian investors as they do in other markets. Fewer than two dozen equity ETFs are registered in Brazil, according to Bloomberg, despite the fact that it is the largest investment and asset management market in Latin America.
The article also highlights data from the Brazilian capital market association Anbima which shows that of the 5.8 trillion reais ($ 1.1 trillion) invested in funds, only 0.5% is invested in ETFs.
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