By Brazil Stock Guide – Brazil’s National Bank for Economic and Social Development (BNDES) has launched a public call to select up to five exchange-traded funds (ETFs) — equity, fixed-income, or hybrid — that may each receive up to R$200 million ($36 million). The bank will be allowed to invest up to 50% of each fund’s net asset value, for a total potential commitment of R$1 billion ($180 million) in 2026, marking a renewed effort to reenter the equity market through its investment arm, BNDES Participações (BNDESPar).
Proposals may be submitted until December 5, with results expected by March 2026. The initiative aims to stimulate Brazil’s still-nascent ETF market and broaden access to passive investment products. The bank will prioritize newly launched or early-stage funds that complement BNDESPar’s existing portfolio. Key selection criteria include the manager’s track record, management fee, and tracking precision — the lower the cost and the closer the fund mirrors its benchmark, the better.
“Democratizing capital markets”
BNDES President Aloizio Mercadante said the move underscores the role of ETFs as essential tools for deepening Brazil’s capital markets. “It is the duty of a public bank to strengthen and democratize the capital market while promoting reindustrialization and innovation, which are priorities of President Lula’s administration,” he said.
Renewed push and track record
The initiative marks another step in BNDES’s gradual return to equity exposure after years of retrenchment. The bank was a pioneer in Brazil’s ETF industry, creating the country’s first index fund, PIBB11, in 2004, which tracks the 50 most liquid stocks on the Ibovespa. In 2012, it launched ECOO11, linked to the Carbon Efficient Index (ICO2). More recently, in 2024, the bank invested R$40 million ($7.3 million) in DVER11, an ETF tracking companies with boards that reflect Brazil’s racial and gender diversity.
Boosting Brazil’s ETF ecosystem
ETFs — funds that replicate stock or bond indexes and are traded like shares on the B3 — remain a small part of Brazil’s capital market, with roughly R$60 billion ($10.9 billion) in total assets compared to trillions of dollars in the U.S. market. BNDES’s latest initiative seeks to support local asset managers, lower costs for investors, and expand access to passive investment vehicles.
By leveraging its institutional weight, BNDES hopes to combine financial return with structural impact: deepening market liquidity, diversifying funding sources, and backing strategies aligned with green transition and social inclusion goals. If successful, the program could help seed a new generation of locally managed ETFs with a public-development focus.
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