Brazil prioritizes rules for actively managed ETFs

Brazil is preparing to allow actively managed exchange-traded funds, or ETFs, as the securities regulator makes rules for them a priority this year.

Unlike passive ETFs, which track a market index, active ETFs let managers choose investments and adjust the portfolio in an effort to beat a benchmark.

They are designed to retain features associated with ETFs, including daily liquidity, transparency and cost efficiency.

The number of ETFs in Brazil rose from 15 to 225 over the past decade, and net inflows reached 42.5 billion reais through September 2026, a record in data going back to 2004.

Active ETFs could expand existing fund offerings and bring strategies such as buffer funds, which aim to limit some losses.

Their growth will require stronger market infrastructure, more assets traded on exchanges, clear portfolio information and investor education.

Traditional actively managed funds are expected to remain important for less liquid investments and more specialized strategies.