Globally oriented exchange-traded funds (ETFs) are capturing increased attention from institutional and retail investors across Latin America and the U.S. offshore market. The surge in activity for these products is driven by strong returns in traditional cross-border equity markets (especially in the U.S.), their inclusion and promotion on Latin American stock exchanges, and their low cost and liquidity, according to The Cerulli Report, titled “Latin American Distribution Dynamics 2026: Seizing on New Distribution Opportunities in a Shifting Investment Landscape.”
As of March 2026, they detailed, Latin American pension funds and local (onshore) investment vehicles held $195 billion in cross-border ETFs. Of that total, Mexican Afores and investment funds accounted for nearly half, while Chilean and Colombian AFPs contributed approximately $85 billion of the remainder.
“Demand for ETFs is forcing traditional active managers to fight on yet another front. Active managers considering entering the ETF space should evaluate active ETF structures under UCITS regulations as a way to compete with passive products without directly cannibalizing their existing, higher-fee active fund ranges,” says Thomas Ciampi, Director of Latin Asset Management, Cerulli Associates’ strategic partner for Latin America.
He notes that the transition toward target-date and lifecycle pension structures in Mexico and Chile may still generate additional opportunities for traditional active management products, as well as for alternative and private market vehicles.
Alternative assets have evolved from a niche institutional product into a fundamental component of high-net-worth (HNW) portfolios in Chile, Peru, and Colombia, representing a total addressable alternative market of between $60 billion and $120 billion across these three countries. Global platforms have significantly lowered access minimums, moving from requiring direct commitments of $5 million to $10 million down to amounts as low as $100,000 or $250,000 through feeder structures.
At the same time, pension systems across the region added approximately $350 billion in assets in 2025, closing the year at $1.1 trillion and reversing the $118 billion loss from the previous year. Mexico’s Afores led this recovery, backed by a 22% gain in local currency linked to mandatory increases in employer contributions, while conservative election results in Chile and Colombia eased short-term concerns regarding potential structural threats to the AFP pension model.
Regional investment fund AUM surpassed $2 trillion for the first time, marking a 31% increase over the previous year’s $1.6 trillion. However, much of this gain stemmed from the depreciation of the U.S. dollar rather than organic growth. Local currency asset increases ranging between 11% and 35% translated into even larger dollar-denominated gains, led by increases in Peru (41%) and Colombia (35%).
