Latin America Holds $195B in Cross-Border ETFs

Latin American pension funds and onshore mutual funds held $195 billion in cross-border exchange-traded funds as of March 2026, driven by strong returns in US equities, increased listings and promotion on local stock exchanges, and the products’ low fees and liquidity, Cerulli Associates’ Latin American distribution report says.

Mexican Afores and mutual funds held nearly half of the total, while Chilean and Colombian AFPs accounted for about $85 billion of the balance, the report shows.

Investors cited easier access through local exchanges, broad exposure to global equity markets, lower management costs and deep trading liquidity as reasons for buying these ETFs. The report finds demand among both institutional and retail allocators.

Thomas Ciampi, director of Latin Asset Management, called the demand for ETFs “forcing traditional active managers to battle on yet another front.” He recommended that active managers consider UCITS-wrapped active ETF structures to compete with passive products without directly cannibalizing higher-fee active fund lineups. Ciampi also noted that pension reforms toward target-date and life-cycle schemes in Mexico and Chile may create demand for actively managed and private market products.

Alternative assets moved from niche institutional allocations into core holdings for high-net-worth investors in Chile, Peru and Colombia. Cerulli estimates a total addressable market for alternatives in those three countries of roughly $60 billion to $120 billion. Global platforms have reduced minimums for feeder structures from direct-commitment levels of $5 million to $10 million down to entry points of about $100,000 to $250,000.

Pension systems across the region added roughly $350 billion in assets in 2025, finishing the year with $1.1 trillion after a $118 billion loss the prior year. Mexico’s Afores led the recovery, helped by a 22% local-currency gain tied to mandated increases in employer contributions. More conservative electoral outcomes in Chile and Colombia eased near-term concerns about structural threats to their AFP pension models, the report notes.

Regional mutual fund assets under management surpassed $2 trillion for the first time, a 31% rise from $1.6 trillion a year earlier. Cerulli’s analysis says much of the dollar-denominated gain came from currency moves: local-currency AUM rose between 11% and 35% across markets, translating into larger increases in US dollars. Peru recorded a 41% local-currency advance and Colombia 35%.

Cerulli’s report concludes that greater ETF adoption, wider feeder access to alternatives and recovering pension assets are changing product distribution and investor access across Latin America.