Itaú Asset Management achieved an unprecedented milestone in the Brazilian index fund market at the end of last year, becoming the largest Exchange Traded Fund (ETF) manager in the country in terms of assets under management, surpassing BlackRock, the historical leader in this segment worldwide.
With approximately R$30 billion distributed across 31 ETFs , Itaú's asset management arm reached approximately 28% market share, according to March data from the firm. The shift is in assets under management, not in the number of investors. This shows that the asset manager was able to capitalize on the recent market movement.
This is because the industry's growth was not accompanied by an explosion in retail, but by greater use of the institutional market. Today, institutional investors account for 56.1% of the volume under custody, while individuals represent 33.7%, according to data from B3.
Proof of this is that since January 2025, the number of investors in ETFs has increased from 733,000 to 763,000, according to B3. And it was precisely in this more sophisticated audience that Itaú Asset built its advantage, which corresponds to about two-thirds of its total assets under management in ETFs.
“Our dominance in the institutional market, which is much more selective and discerning, shows that we are more efficient at managing ETFs. We have over 20 years of experience in this market,” says Pedro Boainain, director of private credit, fixed income and indexed investments at Itaú Asset, which launched the first product in Brazil in 2004.
Internally, the prevailing view is that, more than price, the competition is about efficiency. The firm closely monitors metrics such as tracking error – the discrepancy between the fund and its benchmark index – and claims to operate at lower levels than its competitors, in addition to maintaining competitive management fees.
“We don’t charge low prices to ‘crush’ the competition. We charge the price that our efficiency and size allow. But this market isn’t just about price,” says Renato Eid Tucci, superintendent of indexed strategies and responsible investment at Itaú Asset.
One example is in the management of stock lending. In Brazil, 100% of this revenue is returned to the shareholder, which can generate significant performance differences between similar ETFs, depending on the efficiency of the asset manager.
Fight for retail
If institutional investors have gained the lead in volume, the next step is to advance on individual investors, a segment in which BlackRock still maintains an advantage in the number of investors.
To that end, Itaú Asset has been investing in financial education and products that are more aligned with the profile of Brazilians, who have historically been concentrated in fixed income.
Fixed-income ETFs have become the main gateway. In addition to simplifying access, these products offer significant advantages: they are not subject to withholding tax , have a flat 15% income tax rate, and eliminate the need to pay taxes via DARF (Brazilian tax form).
Instead of merely serving as a shortcut to replicate an index, the instrument has gained importance in portfolio engineering due to its cost, liquidity, transparency, and tax efficiency.
Over the past two years, the asset manager has launched a series of products with this proposition, combining local fixed income and international exposure, such as strategies linked to Treasuries, gold, and inflation.
More recently, it has moved into even more specific territory: ETFs that buy individual government bonds, such as NTN-Bs with defined maturities.
The goal is to provide investors with predictability (knowledge of rates and terms) along with greater tax and operational efficiency.
According to Eid, the automatic reinvestment of coupons, without immediate tax incidence, can generate a difference of up to 600 basis points compared to direct investment.
The current strategy also reflects lessons learned from past mistakes. The wave of thematic ETFs launched in 2021 (as the entire industry did), which rode the wave of trends such as technology, ESG, and healthcare, had low traction. The only highlight was the technology-focused product, which surpassed R$1 billion.
The conclusion was that Brazilian investors respond better to "simple solutions done well" than to trendy theses. This discipline began to guide the expansion of the product range.
An expanding industry
Itaú Asset 's growth coincides with a turning point in the ETF industry in Brazil. Since January 2025, ETFs have been the fastest-growing fund class in the country (with the exception of Fiagros), doubling in size and exceeding R$ 100 billion under management.
Still, they remain small and represent about 1% of the local fund market. The contrast with the United States is enormous. There, ETFs have already surpassed traditional funds, with more than US$19 trillion under management.
“We always believed in the product, its efficiency and simplicity. But Brazil has always been a country with high interest rates,” says Boainain. “ETFs were seen as 'stocks,' not as an investment vehicle. That is changing.”
The shift began with institutional investors. Asset managers, pension funds, and insurance companies started using ETFs not just as passive exposure, but as a portfolio-building tool – including in more complex strategies.
Within Itaú Asset's own solutions division, which builds customized portfolios for private and institutional clients, the average participation of ETFs is already around 15%.
Itaú Asset's leadership position is occurring in a market that tends towards concentration. In the United States, three firms (BlackRock, Vanguard, and State Street) concentrate more than 80% of assets in ETFs.
The logic is that scale, liquidity, and operational efficiency are key factors in a business with squeezed margins.
And in Brazil, this race has already begun. Asset managers like XP , Bradesco , and BTG Pactual have accelerated recent launches, while new firms are starting to enter the segment. According to B3, 62 new ETFs were listed in 2025 and more than 20 in 2026 alone.
“We welcome the entry of new competitors. But we are not comfortable in the lead. The game is just beginning,” says Eid.
Boainain projects that the Brazilian market could reach R$ 1 trillion in a decade, which would imply annual growth below the current rate.
If this proves true, the competition is likely to follow the same global script. "In the end, there should be few major players left," says Boainain. "And we want to be one of them, with more than 30% market share."
