Itaú Asset and Vanguard announced a strategic partnership aimed at expanding international diversification options for Brazilian investors, developing new products, and sharing expertise across the global ETF industry. The initiative also marks Vanguard’s first strategic partnership in Brazil.
The first practical outcome of the agreement has already emerged in a familiar local product. SPXI11, an Itaú Asset ETF tracking the S&P 500 since 2015, will now use the Vanguard S&P 500 UCITS ETF (trading under the ticker VUAA) as its underlying asset.
According to Carlos Augusto Salamonde, Head of Itaú Asset Management, the partnership combines the manager’s deep knowledge of Brazilian investors with Vanguard’s global expertise to expand access to ETFs and foster long-term portfolio diversification. Meanwhile, Juan Hernandez, Head of Global Distribution for the Americas and UCITS at Vanguard, stated that the collaboration aims to expand access for Brazilian investors and advisors to international diversification, portfolio solutions, and financial education.
The partnership brings together two large-scale asset managers. Itaú Asset manages approximately $250 billion (equivalent to R$ 1.3 trillion), while Vanguard oversees roughly $12 trillion in global assets.
What is VUAA? The new underlying asset for SPXI11
VUAA is the ticker for the Vanguard S&P 500 UCITS ETF (USD) Accumulating, a fund launched in May 2019 and domiciled in Ireland, designed to track the performance of the S&P 500.
Key metrics for VUAA include:
- Total Structure Assets: $86.04 billion
- Number of Holdings: 504 stocks
- Expense Ratio: 0.07% per year
- Regulatory Structure: Irish UCITS
What are UCITS ETFs and why does this structure matter?
VUAA is an ETF structured under the European UCITS directive, an acronym for Undertakings for Collective Investment in Transferable Securities. Created to standardize retail funds offered across Europe, this framework establishes strict rules regarding diversification, transparency, risk management, and investor protection.
In practice, UCITS functions as a common international regulatory framework. A fund under this model can be domiciled in a European jurisdiction while investing in assets around the world. As a result, an Ireland-based UCITS ETF like VUAA can hold shares of US companies and track the S&P 500. Ireland and Luxembourg rank among the primary domiciles for these vehicles.
The structure also enforces asset segregation (ring-fencing). Fund assets are held by an independent custodian and kept entirely separate from the asset manager’s corporate balance sheet. Furthermore, funds must comply with diversification and liquidity requirements while providing standardized reporting on objectives, costs, and risks.
The importance of Irish domiciliation
Being domiciled in Ireland also impacts withholding taxes on dividends received by the fund. Dividends paid by US corporations are subject to taxation before reaching the ETF. Under the tax treaty between Ireland and the United States, dividend withholding tax is reduced from 30% to 15% for Irish-domiciled ETFs.
In the case of VUAA, these net dividends are not distributed periodically to unitholders. Because it belongs to an Accumulating share class, dividend proceeds are automatically reinvested into the fund itself, expanding total fund assets. For investors, this mechanism incorporates dividend returns directly into the ETF’s net asset value, compounding gains over time without requiring manual reinvestments.
It is important to distinguish this internal mechanism from Brazilian tax regulations. For SPXI11 holders, the withholding tax efficiency occurs within the foreign vehicle held by the portfolio. The unitholder continues investing in a Brazil-listed ETF, subject to local tax rules, costs, and regulatory frameworks applicable to domestic products.
The partnership between Itaú Asset and Vanguard represents a strategic move toward expanding international solutions for Brazilian investors. Reshaping SPXI11 connects the Brazilian ETF market with one of the most prominent international fund structures today. By adopting VUAA as its underlying asset, the product gains exposure through a large-scale, low-cost Irish ETF.
